Rosetta Stone 2014 Annual Report Download - page 163

During Executive’s employment, and for a period of twelve (12) months following the termination of Executive’s employment,
Executive will not, within any geographic area served or supervised by Executive during the twelve (12)-month period immediately
preceding the Termination Date:
(1) render or offer any Competing Service or Product to any client or customer for whom Executive provided a Competing
Service/Product on behalf of Company;
(2) render or offer any Competing Service or Product to any Prospective Customer of Company; or,
(3) participate in the recruitment or hiring of any Company employee to provide any Competing Service or Product.
“Competing Service or Product” means producing or selling software or services used for learning foreign languages, including
English as a foreign language, and any other business carried on by the Company during Executive’s employment. A “Prospective
Customer” means any Person that the Executive, or other employee working under the Executive, has entertained discussions with to
become a client or customer of Company at any time during the twelve (12)-month period immediately preceding the Termination Date
and who has not explicitly rejected a business relationship with the Company. For purposes of this Section 9(a), “Company” includes
Company and any Affiliate to which Executive provided services during his employment.
(b) Acknowledgment. Executive acknowledges that in the course of his employment with the Company and its
Affiliates, he has and will become familiar with the trade secrets and other Proprietary Information of the Company and its Affiliates.
Executive further acknowledges that as the Chief Legal Officer and Secretary of the Company, Executive has and will have direct or
indirect responsibility, oversight or duties with respect to the businesses of the Company and its Affiliates and its and their current and
prospective employees, vendors, customers, clients and other business relations, and that, accordingly, the geographical restriction
contained in this Section 9 is reasonable in all respects and necessary to protect the goodwill and Proprietary Information of the
Company and that without such protection the Company’s customer and client relations and competitive advantage would be
materially adversely affected. It is specifically recognized by Executive that his services to the Company and its Affiliates are special,
unique and of extraordinary value, that the Company has a protectable interest in prohibiting Executive as provided in this Section 9,
that Executive is responsible for the growth and development of the Company and the creation and preservation of the Company’s
goodwill, that money damages are insufficient to protect such interests, that there is adequate consideration being provided to
Executive hereunder, that such prohibitions are necessary and appropriate without regard to payments being made to Executive
hereunder and that the Company would not enter this Agreement with Executive without the restriction of this Section 9. Executive
further acknowledges that the restrictions contained in this Section 9 do not impose an undue hardship on him and, since he has general
business skills that may be used in industries other than that in which the Company and its Affiliates conduct their business, do not
deprive Executive of his livelihood. Executive further acknowledges that the provisions of this Section 9 are separate and independent
of the other sections of this Agreement.
(c) Enforcement, etc. If, at the time of enforcement of Section 8 or 9 of this Agreement, a court concludes that the
restrictions stated herein are unenforceable or unreasonable under circumstances then existing, the parties hereto agree that the
unenforceable or unreasonable restriction should be severed from the Agreement and shall not affect the validity of enforceability of
the other restrictions in Section 8 or 9. Because Executive’s services are unique, because Executive has access to Proprietary
Information and for the other reasons set forth herein, the parties hereto agree that money damages would be an inadequate remedy for
any breach of this Agreement. Therefore, without limiting the generality of Section 12(f), in the event of a breach or threatened breach
of this Agreement, the Company or its successors or assigns may, in addition