Exhibit 99.4
FORM OF
NONCOMPETITION/NONSOLICITATION AGREEMENT
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THIS NONCOMPETITION/NONSOLICITATION AGREEMENT, dated as of August __, 1998
(the "Agreement"), is by and between _____________________, a Delaware
corporation (the "Buyer"), and ________________________ (the "Stockholder").
RECITALS
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A. The Stockholder is an officer and stockholder or optionholder of
___________________, a corporation organized under the laws of the State of
Israel (the "Company").
B. The Company is engaged in the business of developing, marketing,
licensing and supporting security software products designed to manage access,
detect and prevent unauthorized access to critical information systems in open
client/server environments, including wide area networks, Internet and intranet
systems (the "Business").
C. Pursuant to and subject to the conditions under an Agreement, dated as
of August __, 1998 (the "Acquisition Agreement"), all of the issued and
outstanding shares of the Company Stock not already owned by Buyer will be
exchanged for newly issued shares of the Buyer Stock (the "Exchange"), after
which the Company will be a wholly-owned subsidiary of the Buyer.
D. The Stockholder will receive a substantial economic benefit upon the
consummation of the Exchange.
E. One of the conditions to the obligations of the Buyer to consummate the
Exchange pursuant to the Acquisition Agreement is that the Stockholder enter
into this Agreement.
E. The Stockholder wishes to enter into this Agreement to induce the Buyer
to consummate the Exchange pursuant to the Exchange Agreement.
AGREEMENTS
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To induce the Buyer to consummate the Exchange pursuant to the Acquisition
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Noncompetition by the Stockholder. The Stockholder acknowledges that:
(a) the Company has been engaged in the Business; (b) the Stockholder is one of
the persons who is primarily responsible for the conduct, management and
operation of the Business by the Company; (c) the Business is conducted by the
Company in Israel, throughout the United States and elsewhere; (d) the
Stockholder's work for and ownership interests in the Company have provided the
Stockholder with trade secrets and confidential information of the Company
concerning the Business; (e) the agreements and covenants contained in this
Agreement are essential to protect the Business conducted by the Company and its
goodwill; and (f) the Buyer would not have entered into the Acquisition
Agreement and will not consummate the Exchange pursuant to the Acquisition
Agreement but for such agreements and covenants. Accordingly, the Stockholder
covenants and agrees as follows:
1.1 Restricted Activities. For a period commencing on the date
hereof and terminating on the third anniversary of the Closing Date (as defined
in the Acquisition Agreement) (the "Restricted Period"), the Stockholder, unless
acting in accordance with the Buyer's prior written consent (which consent may
be given by Buyer's chairman or any other duly authorized officer) or as an
employee of, or as a consultant to, the Buyer, the Company or one of their
affiliates, shall not, in Israel, the United States or any other place where the
Buyer or any of its affiliates (whether such affiliate is now existing or
hereafter formed) conducts, or currently intends to conduct, the Business or any
part thereof, directly or indirectly, own, manage, operate, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as an officer, director, employee, principal, agent,
representative, consultant, investor, owner, partner, manager, joint venturer or
similar affiliation with, any business or enterprise engaged in the Business;
provided, however, that (a) a business or enterprise in the Business shall not
include a business or enterprise in which the Business accounts for less than
20% the revenues, income or the value of the assets of such business or
enterprise and (b) the Stockholder may own, directly or indirectly, solely as an
investment, securities of any person having a class of securities publicly
traded, if the Stockholder is not a controlling person of, or a member of a
group which controls, such person and the Stockholder does not, directly or
indirectly own more than two percent (2%) of any class of securities of such
person.
1.2 Confidential Information; Personal Relationships. Unless
required by law, at all times during and after the Restricted Period, the
Stockholder shall keep secret and retain in strictest confidence, and shall not
use for the benefit of such Stockholder or others, or disclose to others, all
confidential information or matters of the Company, including, without
limitation, trade secrets, product information, customer lists, details of
contracts, pricing policies, price lists, operational methods, employee lists
and evaluations, marketing plans or strategies, business acquisition plans and
new personnel acquisition plans of the Company learned by the Stockholder
heretofore or hereafter. For the purposes of this Agreement, "confidential
information or matters of the Company" does not include information which is or
becomes generally available to the public, other than as a result of a
disclosure in violation of this Agreement.
1.3 Property of the Company Business. All confidential memoranda,
notes, lists, records and other documents or papers (and all copies thereof),
including such items stored in computer memories, or microfiche or by any other
means but excluding solely personal correspondence, records and rolodex cards,
made or compiled by or on behalf of the Stockholder, or made available to the
Stockholder relating to the business of the Company, are
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and shall be the property of the Company and, together with all other property
of the Company in the Stockholder's possession, shall be delivered to the
Company on the Closing Date.
1.4 Employees of the Company. During the Restricted Period, the
Stockholder shall not, directly or indirectly, (a) hire or offer employment to
any individual (other than Stockholder's brother) who is or was at any time
during the Restricted Period an employee of the Company or one of the Company's
subsidiaries, or of Buyer or one of Buyer's subsidiaries ("Employee") or an
Independent Contractor (as hereinafter defined), or (b) encourage any such
individual to terminate his or her relationship with the Company, Company's
subsidiaries, Buyer or Buyer's subsidiaries; provided, however, that (i) if
Stockholder terminates his employment with the Company or Buyer with the consent
of Buyer or six (6) months following the Closing Date, Stockholder can hire or
otherwise work with Xxx Xxxxx, Xxxxxx Xxxxxxx and Xxxxx Xxxxxxx, Xxx Gal, Xxxxx
Xxxxx, Xxxx Xxxxxxx and Xxxxxx Xxxxx, and (ii) one (1) one year following the
Closing Date, Stockholder may hire or work with (X) any Employee who is
terminated by Buyer for reasons other than such Employee's failure to perform
his or her duties or responsibilities to the reasonable satisfaction of Buyer
and (Y) Xxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxx. For purposes of this Section 1.4,
"Independent Contractor" shall include any individual who is or was an
independent contractor whose principal job or function is or was to provide
services to the Company or one of its subsidiaries or to perform significant
services for Buyer or one of Buyer's subsidiaries with respect to the Business.
1.5 Customers of the Company. During the Restricted Period, other
than on behalf of the Company, Buyer or their respective subsidiaries, the
Stockholder shall not solicit any person who is or was a customer or client of
the Company, Buyer, or their respective subsidiaries at any time during the
Restricted Period or a Hot Prospect (defined below) of Buyer the Company, or
their respective subsidiaries for the purpose of (i) engaging in, or assisting
any person or entity in engaging in, the Business, or (ii) soliciting or
encouraging any customer, client or Hot Prospect of the Company, Buyer, or their
respective subsidiaries to terminate or otherwise alter his, hers or its
relationship or prospective relationship with the Company or Buyer. "Hot
Prospect" shall mean those persons or entities to whom the Company, Buyer, or
their respective subsidiaries shall have submitted a written offer to sell
software products which constitute part of the Business.
2. Rights and Remedies Upon Breach. If the Stockholder breaches, or
threatens to commit a breach of, any of the covenants set forth in Section 1 of
this Agreement (the "Restrictive Covenants"), the Buyer shall have the right and
remedy to have the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, including immediate temporary injunctive relief without
bond and without the necessity of showing actual monetary damages, it being
agreed that any breach or threatened breach of the Restrictive Covenants would
cause irreparable injury to the Buyer and its affiliates and that money damages
would not provide an adequate remedy to the Buyer and its affiliates, which
right and remedy is in addition to, and not in lieu of, any other rights and
remedies available to the Buyer under law or in equity. The Restricted Period
shall be extended by any period that Stockholder is in breach of
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the Restrictive Covenants, unless such breach is not willful and does not
materially damage Company, Company's subsidiaries, Buyer or Buyer's
subsidiaries.
3. Severability of Covenants. The Stockholder acknowledges and agrees
that the Restrictive Covenants are reasonable, necessary and valid in duration
and geographical scope and in all other respects. If any court determines that
any of the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall not be affected
thereby and shall be given full effect without regard to the invalid portions.
4. Blue-Pencilling. If any court determines that any of the Restrictive
Covenants, or any part hereof, are unenforceable because of the duration or
geographical scope of such provisions, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.
5. Employment. Stockholder agrees to remain employed by the Company, and
in good faith diligently discharge his duties and responsibilities for a period
not less than six (6) months following the Closing Date so long as the Company's
key executives set forth in Section 1.4(i) are not terminated by Buyer for
reasons other than such executives' failure to perform his or her duties or
responsibilities to the reasonable satisfaction of Buyer. Following the Closing
Date, Stockholder shall have responsibilities and duties consistent with his
current responsibilities, taking into account any necessary and appropriate
modifications resulting from the operation of the Company as a division of
Buyer. During such six (6) month period: (a) the Stockholder shall receive
compensation and benefits substantially similar to the compensation and benefits
paid by the Company to him prior to the Closing Date and (b) Stockholder may
terminate his employment with the Buyer or Buyer's subsidiary with Buyer's
written consent, which consent shall not be unreasonably withheld.
6. Governing Law. All questions concerning this Agreement and the rights
and obligations of the parties hereto shall be governed and construed in
accordance with the internal law, and not the law of conflicts of, the State of
Delaware applicable to agreements made and wholly to be performed in that state.
Buyer and Stockholder agree and consent that the courts of the State of Delaware
or the United States District Courts for the districts located therein
("Delaware Courts") shall have jurisdiction to hear and determine any suit,
action or proceeding, and to settle any disputes which may arise out of or in
connection with this Agreement. Stockholder irrevocably submits to the
jurisdiction of the Delaware Courts, and waives any defenses of forum
nonconveniens or similar defenses.
7. Notices. Any notices or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
overnight courier, sent by certified or registered mail, postage prepaid, or by
facsimile. Any such notice shall be deemed given when so delivered personally,
if sent by overnight courier, one business day after delivery to the overnight
courier, if mailed, three days after the date of deposit in the United States
mail, or if by facsimile, the date of transmission, as follows:
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(i) If to the Buyer, to:
_________________________________
_________________________________
_________________________________
Attention: _____________________
Facsimile: _____________________
With a copy to:
Xxxxxx Xxxxxx & Zavis
000 X. Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(ii) If to the Stockholder, to:
_________________________________
_________________________________
_________________________________
Attention: _____________________
Facsimile: _____________________
With a copy to:
_________________________________
_________________________________
_________________________________
Attention: _____________________
_____________________
Facsimile: _____________________
Any party may by notice given in accordance with this Agreement to the other
party designate another address or person for receipt of notices hereunder.
8. Waivers and Amendments; Remedies. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the Buyer and the Stockholder or, in the
case of a waiver, by the party waiving compliance therewith. No delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part
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of any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies that any party may otherwise have at law or in equity.
9. Binding Effect; No Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors, assigns
and legal representatives. The obligations of the Stockholder under this
Agreement may not be assigned by the Stockholder to any other person.
10. Certain Definitions. As used in this Agreement, the following terms
have the following meanings unless the context otherwise requires:
(i) "affiliate" with respect to any person means any other person,
controlling, controlled by or under common control with, such person; and
(ii) "person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or
other entity.
11. Headings. The headings in this Agreement are for reference only, and
shall not affect the interpretation of this Agreement.
12. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior agreements, written or oral, with respect thereto.
13. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
14. Termination. This Agreement will terminate and be of no further force
or effect if the Acquisition Agreement is terminated in accordance with its
provisions.
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