**MEMORANDUM FOR AVA SOREN** **Re: Meridian Forge Exit Agreement – Redline Priorities** You should not sign the current draft, and you should not rely on the predecessor lawyer’s advice that a court will “blue-pencil” the agreement later. The draft is overbroad, contains unlawful forfeiture and enforcement provisions, and includes an invalid release. Below is the clause-by-clause correction and a prioritized negotiation position. --- ## I. Correcting the Predecessor Lawyer’s Advice The predecessor lawyer’s advice is incorrect: - **“Because you are highly paid, all restraints are enforceable.”** Wrong. High salary does not override the governing reasonableness rules. Even a highly paid president cannot be subjected to an unrestricted 24-month, worldwide, all-division, any-capacity noncompete. - **“A court will blue-pencil anything excessive.”** Wrong. A court may sever a distinct unlawful clause, but it may **not rewrite** a covenant’s duration, territory, business scope, or prohibited role to create a reasonable restraint the parties did not draft. A court will not turn the draft’s 24-month/worldwide/all-division/any-capacity bar into a 12-month/Alder-Birch/Industrial-Sensors/comparable-role bar. - **“Take the severance and rely on the judge to narrow it later.”** Dangerous. The current draft also contains an immediate release, forfeiture of earned compensation, unilateral breach adjudication, and a post-employment invention assignment. Those provisions can be used against you immediately, even if they are ultimately unenforceable. The time to fix them is before signing, not after litigation begins. --- ## II. Clause-by-Clause Redlines ### A. Noncompetition Covenant **Draft problem:** 24-month, worldwide, “any capacity,” all Meridian divisions. **Violations:** - More than 12 months. - Not limited to Alder and Birch, your actual territory. - Covers medical-device and consumer-electronics divisions in which you had no responsibility. - Bans “any capacity,” not just the role in which you had material responsibility. - A court will not rewrite it. **Redline priority:** - **Delete the noncompete entirely.** - You plan to join a company that competes only in industrial sensors, in a product role covering Alder and Birch. Even a properly limited noncompete could block that role. Therefore, deletion is the only position that fully protects your future work. - If Meridian insists on keeping some noncompete, do not accept anything broader than: 12 months, Industrial Sensors only, Alder and Birch only, and only a role with responsibilities materially similar to your Meridian role. But that fallback is **not recommended** because it still likely bars the job you plan to take. --- ### B. Customer Nonsolicitation **Draft problem:** 24-month ban on soliciting or accepting business from any Meridian customer or prospect. **Violations:** - More than 12 months. - Covers all customers and prospects, not just those with whom you had material contact or about whom you received material confidential information. - Covers customers/prospects outside your division and territory. - “Accepting” unsolicited business is broader than nonsolicitation and operates like a noncompete. **Redline priority:** - Limit to **12 months**. - Cover only customers or active prospects of the **Industrial Sensors division** in **Alder and Birch** with whom you had material contact, or about whom you received material confidential information, during your final 12 months. - Change the prohibition from “soliciting or accepting” to “soliciting or diverting.” - Add a carve-out allowing you to accept or service business from customers who contact you without solicitation or through your new employer’s general marketing. --- ### C. Employee Nonsolicitation **Draft problem:** 24-month ban on soliciting, hiring, or employing any current or former Meridian worker. **Violations:** - More than 12 months. - Covers all Meridian workers, not only employees you directly supervised or worked with materially. - Covers former employees and independent contractors. - Bans hiring and employing, not just targeted recruitment. - Does not protect general advertising, unsolicited applications, or hiring people unknown to you. **Redline priority:** - Limit to **12 months**. - Cover only current Meridian employees whom you **directly supervised or worked with materially** during your final 12 months. - Prohibit only targeted solicitation/recruitment or inducement to leave. - Do **not** prohibit hiring someone who applies on their own initiative or responds to a general public advertisement. - No restriction on former employees or employees outside your division/role. --- ### D. Confidentiality **Draft problem:** Permanent confidentiality for all information learned during employment, including skills and experience. **Violations:** - Trade secrets may be protected while they remain trade secrets, but other confidential business information may be restricted for only two years. - Confidentiality cannot cover general skill and experience. - It also cannot cover public information, independently developed information, or information lawfully received from others. **Redline priority:** - Define “Confidential Information” as Meridian trade secrets, protected while they remain trade secrets, plus non-public business information, protected for **two years** after termination. - Exclude: - public information; - general skill, knowledge, and experience; - independently developed information; - information lawfully received from a third party; - information required to be disclosed by law. --- ### E. Post-Employment Invention Assignment **Draft problem:** Meridian claims every invention you conceive within one year after departure if it “relates to Meridian’s current or anticipated business.” **Violations:** - Invention assignment may cover work created during employment using company time, systems, confidential information, or business opportunities. - It may not claim inventions created after employment without company resources merely because they relate broadly to the industry. - “Current or anticipated business” is far too broad, and the one-year post-employment tail is unlawful. **Redline priority:** - **Delete the post-employment invention assignment.** - Meridian may take only inventions actually conceived or reduced to practice during your employment if made with Meridian time, systems, confidential information, or business opportunities, or within the scope of your work. - No assignment of your independent post-employment inventions, even if they relate to industrial sensors. --- ### F. Vested Bonus, Equity, and Severance **Draft problem:** Meridian forfeits the $140,000 vested bonus and all severance if it merely alleges any covenant breach. **Violations:** - Earned salary, vested bonus, and vested equity may not be forfeited for post-employment competition. - The bonus is vested and payable; there is no plan term making it unvested. - The vested equity is not subject to any post-employment forfeiture term. - Earned compensation cannot be delayed until release effectiveness or conditioned on covenant compliance. **Redline priority:** - Meridian must pay all earned salary, the **$140,000 bonus**, and **vested equity** on the normal payment dates, regardless of the severance agreement, release, or later breach allegations. - Those amounts are **not bargaining chips**. - Severance may be conditioned on the release and lawful prospective covenants, but earned compensation may not. --- ### G. Breach, Notice, Cure, Materiality, Adjudication, and Repayment **Draft problem:** Meridian may stop payments and demand repayment in its sole discretion, with no notice, cure period, materiality threshold, or adjudication. **Violations:** - A severance agreement may provide proportionate remedies for a material covenant breach. - It may not let the company, in its sole discretion and without notice, declare any allegation a breach and claw back earned compensation. **Redline priority:** - Define “material breach” objectively. - Require written notice with reasonable detail. - Provide a cure period where the breach is curable. - Require final determination by a court or arbitrator before Meridian can stop severance or demand repayment. - Limit remedies to proportionate relief: Meridian may stop future severance and/or recover severance paid after a material breach, but it may not forfeit or claw back the vested bonus, equity, or other earned compensation. - No punitive automatic forfeiture. --- ### H. Release and Revocation **Draft problem:** Release effective immediately on signing, with no revocation period. **Violation:** - A release becomes effective only after the stated **seven-day revocation period**. - Meridian may condition severance payments on effectiveness, but it may not delay already earned compensation. **Redline priority:** - Include a **seven-day revocation period**. - The release is not effective until the revocation period expires. - Meridian may withhold severance until the release becomes effective, but must still pay the bonus, salary, and vested equity on time. - The release should also exclude claims for earned compensation, benefits, indemnification, and enforcement of the separation agreement. --- ## III. Prioritized Redline Package ### 1. Non-negotiable items You should not sign an agreement without these: - **No noncompete that bars your planned role.** - **No forfeiture or clawback of the vested bonus or vested equity.** - **No unilateral “Meridian alleges a breach” forfeiture or repayment.** - **No release without seven-day revocation.** - **No post-employment invention assignment.** ### 2. Strong negotiating position Offer Meridian a reasonable package: - A **12-month customer non-solicit** limited to customers/prospects you personally served or had material contact with in Industrial Sensors in Alder and Birch. - A **12-month employee non-solicit** limited to targeted recruitment of employees you directly supervised or materially worked with. - Standard **trade secret and limited confidential information** protection. - A valid **release subject to seven-day revocation**. - Severance paid only after the release becomes effective, but earned compensation paid immediately. ### 3. Key talking points with Meridian - “The current noncompete is unenforceable as written, and a court will not rewrite it. We will not sign it.” - “Ava’s bonus and vested equity are already earned. They are not part of the severance negotiation and cannot be conditioned on a release or covenants.” - “Ava is willing to protect Meridian’s trade secrets and customer relationships with reasonable non-solicitation covenants, but she will not accept a bar on working in her industry.” --- ## Bottom Line The draft is heavily one-sided and unenforceable in several key parts. The predecessor’s advice to rely on a court to fix it after signing is wrong and risky. Ava’s top priorities should be: **preserve the earned bonus and equity, keep the planned job, and only sign an agreement with lawful, narrowed non-solicitation and confidentiality terms plus a valid release.**