EXHIBIT 10.36
CONFIDENTIAL
EXECUTIVE AGREEMENT
THIS EXECUTIVE AGREEMENT (this "Agreement") is made as of
August 1, 2003 (the "Effective Date"), by and between Ziff Xxxxx Media Inc., a
Delaware corporation (the "Company") and Xxxx Xxxxxx ("Executive"). Certain
definitions are set forth in the Appendix to this Agreement.
In consideration of the representations and covenants set
forth herein, the parties hereby agree as follows:
1. Employment. The Company shall employ Executive, and Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning August 1, 2003 and ending July
31, 2008 or earlier pursuant to Section 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the
Senior Vice President, Ziff Xxxxx Games Group of the Company and shall have the
normal duties, responsibilities and authority implied by such positions.
Executive shall hold similar positions with any Affiliate of the Company to the
extent Executive may be so appointed by the Company in its sole discretion.
(b) Executive shall report directly to the Company's Chief
Executive Officer ("CEO") or to the President or such other senior Company
executive as the CEO may direct, and shall devote his best efforts and
substantially all of his business time and attention to the business and affairs
of the Company (and to the extent applicable, its Affiliates). Executive shall
perform Executive's duties and responsibilities to the best of Executive's
abilities in a diligent, trustworthy, businesslike and efficient manner.
3. Base Salary; Benefits and Bonuses.
(a) During the Employment Period, Executive's base salary shall be
$270,000 per annum, subject to an annual cost of living increase at the
beginning of each calendar year beginning January 1, 2004 at a rate equal to the
increase in the Consumer Price Index - All Urban Consumers for the New York area
during the prior year, or such higher rate as the Company may designate from
time to time (the "Base Salary"), which salary shall be payable by the Company
in regular installments in accordance with the Company's general payroll
practices and shall be subject to customary withholding.
(b) In addition to the Base Salary, during the Employment Period
Executive shall be eligible to receive an annual bonus (the "Bonus") in an
amount determined by the Company based upon the achievement of performance
targets for such year (which targets will include both quantitative and
qualitative objectives), payable at the Company's discretion. Any such Bonus, if
determined by the Company to be payable, shall be payable within ninety (90)
days following the end of each fiscal year during the Employment Period.
Reasonably in advance of the beginning of each of the Company's fiscal years
during the Term of this Agreement, the parties shall negotiate in good faith to
establish the amount, and any quantitative targets that will be relevant to the
calculation, of Executive's target Bonus for the upcoming fiscal year.
(c) During the Employment Period, (i) Executive shall be entitled
to participate in all of the Company's employee benefit plans and programs for
which senior executive employees of the Company are generally eligible, which
currently include, but shall not be limited to, health insurance, dental
insurance, life insurance, short-term and long-term disability insurance and
participation in the Company's 401(k) plan and (ii) Executive shall be eligible
for not less than four (4) weeks of paid vacation per year in accordance with
the policies of the Company. Executive's right to participate in any employee
benefit plans or programs of the Company shall be subject to the Company's right
to amend, modify or terminate
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any such plan or program in accordance with its terms and applicable law and
subject in each case to any applicable waiting periods or other restrictions
contained in such benefit plans or programs.
(d) The Company shall reimburse Executive for all reasonable
business expenses incurred by Executive in the course of performing Executive's
duties under this Agreement which are consistent with the Company's policies in
effect from time to time for senior executive employees of the Company with
respect to travel, entertainment and other business expenses, subject to the
Company's requirements with respect to reporting and documentation of such
expenses.
4. Termination; Severance.
(a) The Employment Period (i) shall terminate upon Executive's
death or Incapacity; (ii) may be terminated by the Company at any time with
Cause or without Cause; and (iii) may be terminated by Executive at any time for
Good Reason or other than for Good Reason. Executive acknowledges and agrees
that nothing contained herein or in any other agreement or document shall
entitle Executive to remain in the employment of the Company or any of its
Affiliates. "Termination" means such time as of which Executive ceases to be
Employed by the Company, for any reason, whether on account of termination by
the Company, resignation by Executive, Executive's death or Incapacity or
otherwise and "Termination Date" means the date on which Termination occurs.
(b) Upon any Termination, Executive shall be entitled to receive
Executive's Base Salary earned through the Termination Date, prorated on a daily
basis together with all accrued but unpaid vacation time earned by Executive
during the calendar year in which such Termination occurs and any Bonus in
respect of a prior, completed calendar year which is then due and owing and has
not been paid. Except as set forth in Section 4(d), Executive shall not be
entitled to receive Executive's Base Salary or any bonuses or other benefits
from the Company for any period after the Termination Date.
(c) In the event Executive's employment is terminated (i) by the
Company with Cause, (ii) by Executive other than for Good Reason, or (iii) upon
Executive's death or Incapacity, or upon any Termination on or after July 31,
2008, the Company shall have no obligation to make any severance or other
similar payment to or on behalf of Executive.
(d) In the event that Executive's employment is terminated (i) by
the Company without Cause or (ii) by Executive for Good Reason (in either case
prior to the July 31, 2008), following such Termination and upon execution and
delivery by Executive within thirty (30) calendar days after the Termination
Date of a general release in favor of the Company and its Affiliates and its and
their respective officers, directors, employees, representatives, agents and
attorneys, and the successors and assigns of each of the foregoing, in form and
substance satisfactory to the Company, the Company shall, through the first
(1st) anniversary of the Termination Date, (x) pay Executive his annual Base
Salary (as in effect on the Termination Date) in regular installments in
accordance with the Company's general payroll practices and (y) if Executive
elects under COBRA to maintain health insurance benefits through the Company's
group plan (if any), pay that portion of the premium for such benefits that the
Company would have paid had Executive remained an employee of the Company for
such period. After payment of the severance amounts described in this Section
4(d), the Company shall have no obligation to make any further severance or
other payment or provide any other benefit to or on behalf of Executive.
Notwithstanding the foregoing, in the event that Executive shall breach any of
Executive's obligations under Section 5 of this Agreement (except any breach
which Executive carries the burden of proving is solely of a technical nature,
is immaterial and was inadvertent), then, in addition to any other rights that
the Company may have under this Agreement or otherwise, the Company shall be
relieved from and shall have no further obligation to pay Executive any amounts
to which Executive would otherwise be entitled pursuant to this Section 4.
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5. Noncompete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of Executive's
employment with the Company and any applicable Affiliate thereof, Executive will
during the Employment Period become familiar with the trade secrets, business
plans and business strategies and with other Confidential Information (as
defined on the Appendix hereto) concerning the Company and any applicable
Affiliate of the Company (and their respective predecessors, successors and
assigns) and that Executive's services have been and shall be of special, unique
and extraordinary value to the Company and any applicable Affiliate of the
Company. Therefore, Executive agrees that, during the Employment Period and for
one (1) year thereafter (such period, the "Noncompete Period"), Executive shall
not directly or indirectly (whether for Executive or for any other Person) (A)
operate, manage, control, engage in, participate in (whether as an officer,
director, employee, partner, agent, representative or otherwise), invest in,
permit Executive's name to be used by, consult with, advise, render services for
(alone or in association with any other Person), or otherwise assist in any
manner (collectively, to "Participate" or have "Participation" in) or (B) own
any interest in, lend to or invest in (i) International Data Group, Inc., CMP
Media, Inc. (a subsidiary of United News & Media PLC), The Future Network PLC or
CNET Networks, Inc., or any of their respective Affiliates; (ii) any Person
which, to Executive's knowledge, any one or more of the Persons referenced in
clause (i) of this sentence Participates in, owns an interest in, lends to or
otherwise provides financial support to, or is party to one or more agreements
that are singly or in the aggregate are material to either party thereto; (iii)
any Person known to Executive to be a successor, assignee, partner, joint
venturer, subsidiary, division or Affiliate of any of the Persons referenced in
clause (i) or (ii) of this sentence; (iv) any Person known by Executive to
Participate in any business or enterprise which directly or indirectly engages
in the Specified Line(s) of Business (as defined below); or (v) any Person known
to Executive to be a successor, assignee, partner, joint venturer, subsidiary,
division or Affiliate of any of the Persons referenced in clause (iv) of this
sentence (the Persons referenced in this sentence shall be referred to each
individually as a "Restricted Person"). Notwithstanding the foregoing, Executive
may Participate in any business of any entity listed in clauses (ii), (iv) or
(v) of Section 5(a) to the extent his Participation is not directly related to
the Specified Line(s) of Business. For purposes of Section 5(a), Executive shall
not be considered to "own any interest in, lend to or invest in" any corporation
with respect to which (x) Executive owns, indirectly through a mutual fund or
other similar pooled investment vehicle, a passive investment in the
publicly-traded stock of such corporation or (y) Executive owns (either as
shareholder of record or as beneficial owner) publicly-traded stock of a
corporation that constitutes less than 1% of the outstanding shares of such
corporation, provided that (I) with respect to Persons referenced in clause (i)
of the preceding sentence, Executive did not acquire such interest after August
1, 2003, (II) with respect to Persons referenced in clauses (ii), (iii), (iv)
and/or (v) of the preceding sentence, Executive did not acquire such interest
after the date Executive obtained knowledge of facts that would result in such
Person being deemed to be a Restricted Person and (III) the fair market value of
the stock held by Executive in any such corporation does not comprise more than
two percent (2%) of Executive's net worth.
(b) During the Employment Period and for one (1) year thereafter,
Executive shall not directly or indirectly through another Person (i) induce or
attempt to induce any employee of the Company or any Affiliate of the Company to
leave the employ of the Company or such Affiliate, or in any way interfere with
the relationship between the Company or any Affiliate of the Company and any
employee thereof, (ii) hire any person who was an employee of the Company or any
Affiliate of the Company at any time during the one (1) year period prior to the
termination of the Employment Period, (iii) call on, solicit or service any
customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Affiliate of the Company in order to induce or attempt to
induce such Person to cease or reduce doing business with the Company or such
Affiliate (for avoidance of doubt and without limiting the foregoing, it shall
constitute a material violation of this Section 5(b) for Executive to make any
effort to cause any customer, supplier, licensee, licensor, franchisee or other
business relation of the Company to purchase from a third party any goods or
services that are offered at such time by the Company), or in any way
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CONFIDENTIAL
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Affiliate of the Company, including,
without limitation, making any negative statements or communications about the
Company or any of its Affiliates, or (iv) directly or indirectly acquire or
attempt to acquire any business in the United States of America to which the
Company or any of its Affiliates has made an acquisition proposal prior to the
Termination Date relating to the possible acquisition of such business (an
"Acquisition Target") by the Company or any of its Affiliates, or take any
action to induce or attempt to induce any Acquisition Target to consummate any
acquisition, investment or other similar transaction with any Person other than
the Company or any of the Company's Affiliates.
(c) If, at the time of enforcement of Section 5 of this Agreement,
a court shall hold that the duration, scope, or area restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto agree
that the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and that
the court shall be allowed and directed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by law. Because
Executive's services are unique and because Executive has access to Confidential
Information and Work Product (as defined on the Appendix hereto), the parties
hereto agree that money damages would not be an adequate remedy for any breach
of this Agreement. Therefore, in the event a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violations of, the provisions hereof (without posting
a bond or other security). In addition, in the event of an alleged breach or
violation by Executive of any one or more of the subsections of this Section 5,
the period set forth in such subsection shall be tolled until such breach or
violation has been duly cured. Executive agrees that the restrictions contained
in Section 5 are reasonable and that Executive has received consideration in
exchange therefor.
(d) As used herein, "Specified Line(s) of Business" shall mean (i)
any business that is primarily related to (x) the creation or display of content
in any medium (including without limitation in print, through electronic mail or
via Internet web sites), which content is primarily related to electronic games
or video games, and/or (y) the sale of advertising or subscriptions related to
such content, and/or (z) the sale of goods or services related to electronic
games or video games; and (ii) any other Company business (including without
limitation any business acquired or developed by the Company after the Effective
Date) with respect to which Executive assumes executive responsibilities during
the Employment Period.
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6. Other Terms and Conditions. The terms and conditions set forth
on the Appendix attached hereto are incorporated herein by reference as if fully
set forth herein and constitute an integral part of this Agreement.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Executive Agreement on the date first written above.
ZIFF XXXXX MEDIA INC.
BY: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
ITS: Chief Executive Officer
EXECUTIVE:
/s/ Xxxx Xxxxxx
--------------------------------
XXXX XXXXXX
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APPENDIX TO EXECUTIVE AGREEMENT
1. Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipients at the address indicated
below or to such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party: (a) if to Executive: Xxxx Xxxxxx, X.X. Xxx 000, Xxxx, Xxxxxxxxxx 00000
and (b) if to the Company: Ziff Xxxxx Holdings, Inc., 00 X. 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: General Counsel. Any notice under this
Agreement shall be deemed to have been given five (5) calendar days after
deposit in the U.S. mail, if mailed, or otherwise when so delivered or sent
otherwise.
2. Representations and Warranties.
(a) By the Company. In connection with the execution and delivery
of this Agreement, the Company represents and warrants to Executive as of the
Effective Date that (i) the execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary corporate
action and (ii) this Agreement constitutes a valid and binding obligation of the
Company and the execution, delivery and performance of this Agreement by the
Company does not and shall not conflict with, violate or cause a breach of any
agreement, contract or instrument to which the Company is a party or any
judgment, order or decree to which the Company.
(b) By Executive. In connection with the execution and delivery of
this Agreement, Executive represents and warrants to the Company as of the
Effective Date that (i) this Agreement constitutes the legal, valid and binding
obligation of Executive and the execution, delivery and performance of this
Agreement by Executive does not and shall not conflict with, violate or cause a
breach of any agreement, contract or instrument to which Executive is a party or
any judgment, order or decree to which Executive is subject; (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreements with any person or entity other than the Company;
(iii) Executive has consulted with independent legal counsel regarding his/her
rights and obligations under this Agreement and that Executive fully understands
the terms and conditions contained herein; and (iv) Executive has obtained
advice from persons other than the Company and its counsel regarding the tax
effects of the transaction contemplated hereby.
3. General Provisions
(a) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement and the agreement attached
hereto as Exhibit A (the "Option Agreement," that contains, among other
provisions, provisions related to the grant of options to Executive to purchase
certain shares of the Company's capital stock), those documents expressly
referred to herein or therein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof or
thereof in any way.
(c) Counterparts; Signatures Received via Facsimile. This
Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement. Signatures received via facsimile shall be deemed originals for all
purposes.
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(d) Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company and their respective successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable.
(e) GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF DELAWARE WILL
GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL OTHER ISSUES CONCERNING THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER
OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(f) Jurisdiction. The state and federal courts located in New York
County, New York (the "Permitted Courts"), shall have sole and exclusive
jurisdiction of any dispute arising out of or related to this Agreement
(including without limitation allegations of the breach or attempted breach
thereof) (a "Proceeding"). Notwithstanding the foregoing, nothing in this
paragraph alters any agreement the parties may previously have made or may in
the future make to arbitrate disputes. Each of the parties hereby expressly
consents to the personal jurisdiction of each of the Permitted Courts with
respect to any Proceeding and waives any objection, whether on the grounds of
venue, residence or domicile or on the ground that the Proceeding has been
brought in an inconvenient forum, to any Proceeding brought in a Permitted
Court.
(g) Remedies. Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorney's fees) caused by any breach of
any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(h) Interpretation. The Article and Section headings used herein
are for convenience only and do not define, limit or construe the content of
such sections. The parties acknowledge that they are entering into this
Agreement after consulting with counsel and based upon equal bargaining power,
with each party having the ability to participate in its preparation. The terms
of this Agreement shall not be interpreted in favor of or against any party on
account of the draftsperson, but shall be interpreted solely for the purpose of
fairly effectuating the intent of the parties hereto.
(i) Survival. The provisions set forth in Section 4 and Section 5
of the Agreement and the provisions set forth in this Appendix shall survive and
continue in full force and effect in accordance with their terms notwithstanding
any termination of the Employment Period.
(j) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only by means of a written instrument signed by each of the
Company and Executive.
4. Certain Definitions
(a) "Affiliate" of a Person means any other Person, entity or
investment fund controlling, controlled by or under common control with the
first-mentioned Person and, without limiting the foregoing, in the case of a
partnership, any partner thereof is deemed to be an Affiliate of the
partnership.
(b) "Cause" means (i) the commission by Executive of a felony or a
crime involving moral turpitude, (ii) the commission of any other act or
omission by Executive constituting fraud against the Company or any of its
Subsidiaries, or the violation of the duty of loyalty to the Company and/or its
Subsidiaries under applicable law, (iii) substantial failure by Executive to act
as reasonably and lawfully directed by the CEO of the Company, which failure, if
curable, is not cured within fifteen (15) calendar days after written notice
thereof to Executive, (iv) willful or reckless misconduct or, if curable, gross
negligence by
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Executive which is not cured within fifteen (15) days after written notice
thereof to Executive, with respect to the Company or any of its Subsidiaries, or
(v) any other material breach by Executive of this Agreement or Company policy
established by the CEO of the Company, which breach, if curable, is not cured
within fifteen (15) calendar days after written notice thereof to Executive.
(c) "Confidential Information" means all information of a
confidential or proprietary nature (whether or not specifically labeled or
identified as "confidential"), in any form or medium, that is or was disclosed
to, or developed or learned by, Executive in connection with Executive's
relationship with the Company or any of its Affiliates prior to the date hereof
or during the Employment Period and that relates to the business, products,
services, financing, research or development of the Company or any of its
Affiliates or their respective suppliers, distributors or customers.
Confidential Information includes, but is not limited to, the following: (i)
internal business information (including information relating to strategic and
staffing plans and practices, business, training, marketing, promotional and
sales plans and practices, cost, rate and pricing structures, accounting and
business methods); (ii) identities of, individual requirements of, specific
contractual arrangements with, and information about, any of the Company's or
any of its Affiliates' suppliers, distributors and customers and their
confidential information; (iii) trade secrets, know-how, compilations of data
and analyses, techniques, systems, formulae, research, records, reports,
manuals, documentation, models, data and data bases relating thereto; (iv)
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable); and (v) Acquisition Targets and potential acquisition candidates.
Confidential Information shall not include information that Executive can
demonstrate: (a) is or becomes publicly known through no wrongful act or breach
of obligation of confidentiality; (b) was rightfully received by Executive from
a third party (other than ZD, Inc. or any of its successors or Affiliates)
without a breach of any obligation of confidentiality by such third party; (c)
was known to Executive prior to his employment with the Company and its
Affiliates, or (d) is required to be disclosed pursuant to any applicable law or
court order; provided, however, that Executive provides the Company with prior
written notice of the requirement for disclosure that details the Confidential
Information to be disclosed and cooperates with the Company to preserve the
confidentiality of such information to the extent possible.
(d) "Good Reason" means the occurrence, without Executive's
consent, of any of the following: (i) unless corrected within fifteen (15)
calendar days after written notice by Executive to the CEO of the Company of
objection thereto, the assignment to Executive of any significant duties
materially inconsistent with Executive's status as the Senior Vice President,
Ziff Xxxxx Games Group of the Company or a diminution of Executive's title(s),
or a substantial adverse alteration in the nature or status of Executive's
responsibilities; (ii) a reduction in Executive's annual Base Salary as
contemplated hereby, except for across-the-board salary reductions similarly
affecting all senior executives of the Company; or (iii) the Company requires
Executive to relocate from the San Francisco metropolitan area.
(e) "Incapacity" means the disability of Executive caused by any
physical or mental injury, illness or incapacity as a result of which Executive
is unable to effectively perform the essential functions of Executive's duties
as determined by the Company in good faith, for a period of ninety (90)
consecutive calendar days or a period of one hundred and twenty (120) calendar
days during any one hundred and eighty (180) calendar day period.
(f) "Person" means an individual or a corporation, partnership,
limited liability company, trust, unincorporated organization, association or
other entity.
(g) "Work Product" means all inventions, innovations,
improvements, developments, methods, processes, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable or
reduced to practice or comprising Confidential Information) and any
copyrightable work, trade xxxx, trade secret or other intellectual property
rights (whether or not comprising Confidential Information) and any other form
of Confidential Information, any of which relate to the Company's or any of its
Affiliates' actual or demonstrably anticipated business, research and
development or existing or future products or services and which were or are
conceived, reduced to practice, contributed to, developed, made or acquired by
Executive
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(whether alone or jointly with others) while employed (both before and after the
Effective Date) by the Company or its Affiliates or any of their respective
predecessors, successors or assigns. The parties agree that the definition of
"Work Product" contained in the Option Agreement shall be deemed deleted and
replaced in its entirety with the definition of "Work Product" set forth in the
immediately preceding sentence.
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