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, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee and excluding the general knowledge, skill, and experience Employee acquired during employment.

“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 the special facts, over and above ordinary competition, that a Tennessee covenant may protect, namely Employer's Confidential Information, Employer's trade secrets as protected by the Tennessee Uniform Trade Secrets Act (Tenn. Code Ann. §§ 47-25-1701 to 47-25-1709), Employer's investment in special training provided to Employee, and Employer's customer relationships in which Employee is the face of Employer's business, but not Employer's interest in avoiding ordinary competition.

“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.

“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.

“Trade Secrets” has the meaning given in the Tennessee Uniform Trade Secrets Act, Tenn. Code Ann. § 47-25-1702.

Employer and Employee acknowledge that each restrictive covenant in this agreement is intended to protect one or more of Employer's Protected Interests and to impose no restraint greater than is required for that protection. Tennessee treats covenants not to compete as disfavored restraints of trade that are nonetheless not invalid per se and may be enforced when reasonable under the particular circumstances (Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984)). The parties acknowledge that a covenant may not be used to restrain ordinary competition and that Employer relies on special facts present over and above ordinary competition — its Confidential Information and trade secrets, its investment in special training, and its customer relationships in which Employee is the face of the business — and would not provide Employee with access to these Protected Interests absent the protections in this agreement. Each covenant is intended to be no greater in time, territory, and scope than is required to protect Employer's business interest, weighed against the consideration supporting this agreement, the threatened danger to Employer in the absence of the covenant, the economic hardship imposed on Employee, and the public interest (Allright Auto Parks, Inc. v. Berry, 409 S.W.2d 361 (Tenn. 1966)).

The parties acknowledge that this agreement is supported by adequate consideration and record the timing of its execution. If this agreement is signed at the outset of employment, the offer and commencement of employment is the consideration. If Employee is an existing employee signing after hire, the parties agree that Employee's continued employment for an appreciable length of time is consideration for the covenants, consistent with Central Adjustment Bureau, Inc. v. Ingram, 678 S.W.2d 28 (Tenn. 1984), which held such covenants binding because of the length of each employee's continued employment; where continued employment is brief, Employer intends to provide, and this recital should identify, separate consideration for the covenants. Employer has given Employee the opportunity to consult with independent legal counsel before signing this agreement. Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests, and understands that adequate consideration establishes only that the covenants are supported, not that they are reasonable — each covenant must independently satisfy the Tennessee reasonableness test on the protectable interest, time, territory, and scope. 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, for as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. Trade secrets are protected under Tennessee law, including the Tennessee Uniform Trade Secrets Act, Tenn. Code Ann. §§ 47-25-1701 to 47-25-1709, under which a contractual duty to maintain secrecy or limit use of a trade secret is not void or unenforceable solely for lack of a durational or geographical limitation (Tenn. Code Ann. § 47-25-1708(b)(1)). This confidentiality obligation is intended to operate alongside, and independent of, any restrictive covenant, and does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during 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, including Section 7 of the National Labor Relations Act (29 U.S.C. § 157); (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. The parties intend that these return, deletion, and certification mechanics provide contemporaneous evidence of Employer's efforts to protect its Confidential Information and trade secrets — the special facts on which a Tennessee covenant depends.

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. An employee non-solicitation agreement is expressly preserved from the 2026 statute's non-compete rules (Tenn. Code Ann. § 50-1-210(c)); this covenant is drawn to stay within that preserved category, reaching only Covered Employees the departing Employee actually worked with or managed, and it does not operate as a workforce-wide hiring ban.

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. A client or customer non-solicitation agreement is expressly preserved from the 2026 statute's non-compete rules (Tenn. Code Ann. § 50-1-210(c)); this covenant is drawn to stay within that preserved category, reaching only Covered Customers with whom Employee had material contact and mapping directly onto Employer's interest in the customer relationships in which Employee was the face of the business. Together with the confidentiality and trade-secret protections in this agreement, a customer non-solicit is often a stronger and more readily enforceable protection than a broad non-compete, and it must not be drawn so broadly that it effectively bars Employee from competing at all.

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact. This restriction is broader than non-solicitation because it applies even if the Covered Customer approaches Employee. The 2026 statute's preserved list names confidentiality and non-solicitation agreements but not a non-dealing covenant (Tenn. Code Ann. § 50-1-210(c)), so a court may analyze this covenant under the disfavored-restraint framework rather than under the carve-out; it is therefore sized tightly to the customer relationships it protects and reaches only Covered Customers with whom Employee had material contact.

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 exists to protect Employer's Protected Interests — the special facts over and above ordinary competition on which a Tennessee covenant depends — and not to restrain ordinary competition (Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984)). Consistent with Allright Auto Parks, Inc. v. Berry, 409 S.W.2d 361 (Tenn. 1966), the parties intend this covenant to be no greater in time and territory than is required to protect Employer's business interest, weighed against the consideration, the threatened danger to Employer, the hardship on Employee, and the public interest. For a covenant governed by the 2026 statute — one entered into, renewed, or amended on or after July 1, 2026 — the Restricted Period is intended to stay within the applicable presumption window of Tenn. Code Ann. § 50-1-210, which a court applies as a rebuttable presumption and beyond which a longer term is presumed unreasonable in time; a within-window term is presumed reasonable in time only, and geography and the protectable interest remain to be tested. This covenant is also subject to the compensation threshold and worker exclusions stated below. If Employer has identified specific competitors in Cover Terms under Specified Competitors, the parties intend this covenant to be understood and, if necessary, enforced as limited to those named competitors, because a restraint bound to named competitors is strong evidence that it is no greater than required. Passive Public Holdings are permitted.

Notwithstanding any other provision of this agreement, and for a covenant governed by 2026 Tenn. Pub. Acts ch. 934 — one entered into, renewed, or amended on or after July 1, 2026, or enforced in a proceeding occurring on or after that date — the non-compete restriction is not enforceable against, and Employer will not require, request, or enforce it against, Employee if Employee's annualized compensation is less than seventy thousand dollars ($70,000); a non-compete executed in violation of that bar is void and unenforceable as a matter of public policy (Tenn. Code Ann. § 50-1-211(a), (c)). For this purpose, annualized compensation includes wages, salary, commissions, nondiscretionary bonuses, and other remuneration, and for an hourly employee is calculated by multiplying the hourly rate by forty and the product by fifty-two (Tenn. Code Ann. § 50-1-211(b)(2)). In addition, and regardless of Employee's compensation, duration, or territory, the non-compete restriction does not apply to and is void against Employee if Employee is a physician who specializes in the practice of emergency medicine: the health-care safe harbor does not reach emergency-medicine physicians (Tenn. Code Ann. § 63-1-148(d)), and except as specifically prescribed by statute, physicians' covenants not to compete are unenforceable and void (Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005)). The other restrictive covenants in this agreement remain in effect to the extent they are otherwise enforceable.

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 post-employment restraint analyzed under the same Tennessee reasonableness standard as the non-compete in this agreement, and to the extent it operates as a non-compete governed by the 2026 statute it is subject to the same compensation threshold and worker exclusions stated above (Tenn. Code Ann. §§ 50-1-210, 50-1-211).

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, including rights protected under Section 7 of the National Labor Relations Act.

If Employee is a health-care provider licensed under chapters 3, 4, 5, 6, 8, 9, or 11 of Title 63 of the Tennessee Code, any covenant in this agreement restricting Employee's right to practice Employee's profession upon termination is intended to stay within the statutory safe harbor of Tenn. Code Ann. § 63-1-148(a): it must be set forth in a written document signed by Employee and Employer, run two years or less in duration, and stay within the greater of a ten-mile radius from Employee's primary practice site while employed or contracted or the county in which that primary practice site is located. A covenant tied to the purchase or sale of Employee's practice carries a rebuttable presumption that its agreed duration and area are reasonable (Tenn. Code Ann. § 63-1-148(b)). Meeting the safe harbor deems the covenant reasonable in time and area only; the protectable-interest requirement and the other common-law limits still apply. This safe harbor does not reach a physician who specializes in the practice of emergency medicine (Tenn. Code Ann. § 63-1-148(d)), and against such a physician any non-compete is void and unenforceable, as provided in the Compensation Threshold and Workers Exempt from the Non-Compete section above; the confidentiality and non-solicitation covenants in this agreement are not affected.

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.

Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach this agreement. Employee consents to this disclosure. Employer acknowledges that, from July 1, 2026, an employer may not require, request, or enforce a non-compete against a below-threshold employee (Tenn. Code Ann. § 50-1-211(a)), so any notice built on a non-compete should be conditioned on a covenant that actually survives the compensation threshold and the reasonableness analysis.

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, so that the full duration of the restriction runs from the date the breach ends. Tennessee has no statute or controlling appellate decision squarely endorsing tolling or extension of the restricted period during breach or litigation, and the 2026 statute measures its presumption window from the date the relationship terminates and is silent on pausing it (Tenn. Code Ann. § 50-1-210(b)(1)); any extension is itself a restraint that must remain reasonable, because a court may modify or refuse to enforce an unreasonable covenant (Vantage Technology, LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999)). The parties therefore intend this extension to be defined and bounded, not open-ended or indefinite.

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, including relief under the Tennessee Uniform Trade Secrets Act, under which a court may award exemplary damages of up to twice any compensatory award for willful and malicious misappropriation of a trade secret (Tenn. Code Ann. § 47-25-1704(b)). Employer acknowledges the limit on this remedy in the covenant setting: a Tennessee court may refuse to enforce a covenant outright, even one backed by a legitimate protectable interest, where the hardship to Employee and the harm to the public interest outweigh Employer's interest (Columbus Medical Services, LLC v. Thomas, 308 S.W.3d 368 (Tenn. Ct. App. 2009)). If this agreement provides for attorney's fees, the parties intend any such provision to be mutual and prevailing-party based; absent such a provision, the American Rule applies and each party bears its own fees.

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, so that a court's refusal to enforce one covenant, or a court's decision to enforce a covenant only to a reasonable extent, does not affect the others.

Tennessee follows a rule of reasonableness rather than the strict blue-pencil rule, so a court may modify an overbroad covenant so as to render it reasonable (Central Adjustment Bureau, Inc. v. Ingram, 678 S.W.2d 28 (Tenn. 1984); Vantage Technology, LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999)), and for a covenant governed by the 2026 statute a court may modify a restrictive covenant to render it reasonable and enforceable (Tenn. Code Ann. § 50-1-210(d)); Employer therefore requests reformation if any restraint in this agreement is found to be overbroad. That power is discretionary and has a hard limit: a covenant shown by credible evidence to be deliberately unreasonable and oppressive is invalid rather than reformed (Central Adjustment Bureau), and a court may refuse enforcement entirely where the hardship to Employee and the harm to the public interest outweigh Employer's legitimate interest (Columbus Medical Services, LLC v. Thomas, 308 S.W.3d 368 (Tenn. Ct. App. 2009)). Accordingly, each restrictive covenant in this agreement is drawn as a reasonable, severable restraint sized to the Protected Interests from the start and is intended to be enforceable as written rather than in reliance on judicial revision.

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. 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. Per-covenant survival keeps each clock independently checkable, which matters in Tennessee because the non-compete answers to the § 50-1-211 threshold and the § 50-1-210 time presumptions after July 1, 2026 while the preserved confidentiality and non-solicitation covenants do not.

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns. The parties acknowledge that, while an assignment alone moves the covenant, a renewal or amendment papered alongside a transaction on or after July 1, 2026 pulls the covenant into the 2026 statutory regime, including the compensation threshold and the time presumptions (2026 Tenn. Pub. Acts ch. 934, § 3).

This agreement is governed by the law listed in Cover Terms. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law. If the law of a state other than Tennessee is selected for an agreement with a Tennessee worker, the parties intend that selection to be executed in good faith and to rest on a genuine connection to the parties, because a Tennessee court honors a contractual intent to apply another jurisdiction's law only when certain requirements are met, beginning with good-faith execution (Vantage Technology, LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999)); a clause deployed to escape Tennessee's protections, including the Tenn. Code Ann. § 50-1-211 seventy-thousand-dollar bar once effective, is vulnerable. The parties intend that the governing-law and venue choices match where Employee actually lives and works.

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. 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. The parties acknowledge that a renewal or amendment on or after July 1, 2026 brings this agreement within the 2026 statutory regime (2026 Tenn. Pub. Acts ch. 934, § 3).