Employee Restrictive Covenant Agreement

“Competitive Business” means the business activities described in Cover Terms under Competitive Business.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, business methods, customer lists, secret formulas or processes, pricing, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee.

“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.

“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means Employer's legitimate business interests in its Confidential Information and trade secrets, its relationships with customers, clients, and referral sources, its workforce stability, and its goodwill, in each case only to the extent a restraint imposed to protect them is no greater than is required for Employer's protection under NRS 613.195(1)(b).

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason, subject to the continued-pay condition in the Post-Restructuring Enforcement section for any restructuring termination.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means to directly or indirectly contact, approach, induce, encourage, or provide Confidential Information to any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee, and does not include providing service to a former customer or client who, without any contact instigated by Employee, voluntarily chose to leave Employer and seek Employee's services.

“Trade Secrets” has the meaning given in the Nevada Uniform Trade Secrets Act, NRS 600A.030.

Employer and Employee acknowledge that each restrictive covenant in this agreement is intended to satisfy NRS 613.195(1): it is supported by valuable consideration; it imposes no restraint greater than is required for the protection of the employer for whose benefit the restraint is imposed; it imposes no undue hardship on Employee; and its restrictions are appropriate in relation to the valuable consideration supporting them. The named Employer is the entity whose Protected Interests the restraints serve, so that each restraint can be measured against the protection Employer actually requires. Employer would not provide Employee with access to its Protected Interests absent the protections in this agreement.

The parties agree that this agreement is supported by valuable consideration within the meaning of NRS 613.195(1)(a) — namely the compensation, access to Confidential Information, and other benefits Employer provides to Employee under this agreement, which the parties agree are given in exchange for, and are appropriate in relation to, the restrictive covenants — and that those restrictions are appropriate in relation to that consideration as NRS 613.195(1)(d) requires. Consistent with Camco, Inc. v. Baker, 113 Nev. 512, 936 P.2d 829 (1997), continued at-will employment can itself be sufficient consideration for a post-hire covenant, but where the restraint is significant Employer should record the specific additional benefit given in exchange for it. Although no Nevada statute requires it, Employer has advised Employee that Employee may consult with an attorney of Employee's choosing before entering into this agreement, and Employee acknowledges having had a reasonable opportunity to do so. Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests. This agreement is effective as of the Effective Date listed in Cover Terms.

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity, consistent with the Nevada Uniform Trade Secrets Act, NRS 600A.010 et seq., under which information keeps its trade-secret status only so long as it derives independent economic value from secrecy and remains the subject of reasonable secrecy efforts. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. This confidentiality covenant is intended to fall within the exception in NRS 613.200(4) for a post-termination agreement that prohibits disclosure of trade secrets, business methods, lists of customers, secret formulas or processes, and confidential information, that is supported by valuable consideration, and that is otherwise reasonable in scope and duration; it does not restrict Employee from working elsewhere and is not intended to operate as a restraint on obtaining employment.

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law; (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request. A documented return-and-certification process evidences the reasonable secrecy efforts that NRS 600A.030 requires for information to retain trade-secret status.

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees. Nevada's non-compete statute does not separately regulate employee non-solicitation, so this covenant is drawn no broader than necessary to protect Employer's workforce stability and is not intended to operate as a de facto bar on any former colleague obtaining employment elsewhere in Nevada, conduct NRS 613.200(1) makes a gross misdemeanor.

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. This covenant polices outreach, not service: consistent with NRS 613.195(2), it does not restrict, and Employer will not bring an action to restrict, Employee from providing service to a former customer or client whom Employee did not solicit, who voluntarily chose to leave Employer and seek Employee's services, and whom Employee serves in compliance with the covenant's other valid limits as to time, geographical area, and scope of activity.

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer. This restriction is broader than non-solicitation because it can apply even where the Covered Customer first initiated contact; it is therefore expressly limited by the NRS 613.195(2) volunteer-customer carve-out. This covenant does not, and may not, restrict Employee from providing service to a former customer or client whom Employee did not solicit, who voluntarily chose to leave Employer and seek Employee's services without any contact instigated by Employee, and whom Employee serves within the covenant's other valid limits, and Employer will not bring an action to restrict that protected service.

During the Restricted Period, Employee must not engage in, be employed by, consult for, or have an active ownership interest in any Competitive Business within the Restricted Territory. This covenant is void and unenforceable unless it satisfies each condition of NRS 613.195(1) — valuable consideration, no restraint greater than required for Employer's protection, no undue hardship on Employee, and restrictions appropriate in relation to the consideration. This covenant does not apply to, and is void against, any Employee who is paid solely on an hourly wage basis, exclusive of any tips or gratuities (NRS 613.195(3)). It is limited by the NRS 613.195(2) volunteer-customer carve-out and by the Post-Restructuring Enforcement section. Passive Public Holdings are permitted.

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This restriction primarily targets active or material ownership in private competitors. Passive Public Holdings are permitted. Because this covenant restrains active roles at and material participation in a Competitive Business, it functions as a covenant not to compete under NRS 613.195; it therefore does not apply to an Employee paid solely on an hourly wage basis (NRS 613.195(3)), is subject to the same NRS 613.195(1) validity conditions and the Post-Restructuring Enforcement section as the non-compete in this agreement, and is drawn no broader than is required to protect Employer's Protected Interests.

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law.

Notwithstanding any other provision of this agreement, no covenant not to compete in this agreement applies to, and each is void and unenforceable against, an Employee who is paid solely on an hourly wage basis, exclusive of any tips or gratuities (NRS 613.195(3)). This exclusion applies regardless of the consideration provided, the tailoring of the restraint, or any acknowledgement by Employee, and an attempt to enforce a covenant against such an Employee exposes Employer to a mandatory award of the Employee's reasonable attorney's fees and costs (NRS 613.195(7)).

If the termination of Employee's employment is the result of a reduction of force, reorganization, or similar restructuring of Employer, then each covenant not to compete in this agreement is enforceable only during the period in which Employer is paying Employee's salary, benefits, or equivalent compensation, including, without limitation, severance pay (NRS 613.195(5)). For such a termination, the Restricted Period runs no longer than the period for which that pay actually continues.

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment, including any restrictive covenant with a prior employer that may have been assigned to a successor without Employee's consent.

Employer may disclose the existence and terms of this agreement to a prospective employer or business associate of Employee only where Employer has a reasonable, good-faith belief that Employee is likely to breach a covenant that is itself valid and enforceable under NRS 613.195. Employer will not use any such notice to willfully prevent Employee from obtaining employment elsewhere in Nevada, conduct NRS 613.200(1) makes a gross misdemeanor. Employee consents to a disclosure made within these limits.

If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by one day for each day of the breach, up to the original duration of that covenant, so that the full duration of the restriction runs from the date the breach ends. No Nevada statute or appellate decision squarely approves or rejects tolling; this extension is drafted as a bounded, defined term so that it may be weighed with the rest of the covenant under NRS 613.195, and never as an open-ended restraint.

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law; any injunction will track each covenant as revised under NRS 613.195(6), not necessarily as written. Employee retains the mandatory award of reasonable attorney's fees and costs that NRS 613.195(7) requires where a covenant applies to an Employee paid solely on an hourly wage basis or where Employer has restricted or attempted to restrict protected volunteer-customer service, and no provision of this agreement displaces that statutory award.

If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect. Each restrictive covenant in this agreement is intended to be independently enforceable.

The parties acknowledge that NRS 613.195(6) makes judicial revision mandatory, not discretionary: where a covenant is supported by valuable consideration but its limitations as to time, geographical area, or scope of activity are unreasonable, impose a greater restraint than is necessary for Employer's protection, or impose undue hardship on Employee, the court shall revise the covenant to the extent necessary and enforce it as revised. Consistent with Tough Turtle Turf, LLC v. Scott, 139 Nev. Adv. Op. 47, 537 P.3d 883 (2023), that duty overruled the prior rule of Golden Road Motor Inn, Inc. v. Islam, 132 Nev. 476, 376 P.3d 151 (2016), under which an unreasonable covenant was wholly unenforceable — but two limits remain: a covenant unsupported by valuable consideration stays unenforceable, and a court will revise rather than rewrite, so it will not supply missing essential terms. Each restrictive covenant here is therefore drawn no broader than necessary and is intended to be enforceable as written rather than in reliance on judicial revision. Consistent with Duong v. Fielden Hanson Isaacs Miyada Robison Yeh, Ltd., 136 Nev. Adv. Op. 87, 478 P.3d 380 (2020), the parties further authorize a court to blue-pencil any overbroad restraint that the mandatory-revision statute does not reach.

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms, so that if a court revises one covenant's duration the separately stated survival terms of the others are unaffected. Obligations under the Confidential Information and Trade Secret Protection section survive indefinitely to the extent they relate to trade secrets. All other provisions survive to the extent necessary to enforce rights that arose during employment.

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate or to a successor that acquires Employer's business through a statutory merger, in which case the covenants pass by operation of law, consistent with HD Supply Facilities Maint., Ltd. v. Bymoen, 125 Nev. 200, 210 P.3d 183 (2009). In an asset sale, however, the covenants not to compete and not to solicit are personal in nature and are not assignable to the purchaser absent Employee's express consent, obtained through arm's-length negotiation and supported by valuable consideration beyond that necessary to support the underlying covenants, consistent with Traffic Control Servs., Inc. v. United Rentals Nw., Inc., 120 Nev. 168, 87 P.3d 1054 (2004); a general successors-and-assigns clause does not substitute for that consent. This section does not affect any reasonable sale-of-business covenant permitted under NRS 598A.040(5). This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.

This agreement is governed by the law listed in Cover Terms, including NRS 613.195 and NRS 613.200 where Nevada law applies. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law. Where Employee works in Nevada, a Nevada-law, Nevada-forum resolution best matches Nevada's public-policy interest in its worker exclusion, volunteer-customer carve-out, and mandatory fee shifting.

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties; any amendment that tightens a restrictive covenant must state the fresh valuable consideration given for the new restriction, so that the tightened restraint stays appropriate in relation to its consideration under NRS 613.195(1)(a) and (d). A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.