# MEMORANDUM

**To:** Ava Soren
**From:** Counsel
**Re:** Meridian Forge draft separation agreement — corrections, redline priorities, and negotiating position
**Privileged & Confidential**

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## 1. Correcting the predecessor lawyer's advice

The prior advice is wrong on every point, and the errors run in both directions — it overstates Meridian's covenants *and* understates the risk of signing.

**Error 1 — "Because you are highly paid, all restraints are enforceable."** Compensation level is not a validating factor. Enforceability turns on tailoring: a noncompete is enforceable *only to the extent* it runs no more than 12 months and is reasonably limited to the products, services, territory, and role in which you had material responsibility. Your $360,000 salary does not convert a 24-month, worldwide, all-division, any-capacity bar into a reasonable restraint. If anything, senior pay is used to justify *narrow* restraints, not global ones.

**Error 2 — "A court will blue-pencil anything excessive."** Under the governing rules, a court may sever a **distinct unlawful clause**, but it may **not rewrite** a covenant's duration, territory, business scope, or prohibited role to manufacture a reasonable restraint the parties never drafted. Meridian's noncompete is defective in all four dimensions simultaneously; there is nothing to sever, only to rewrite. So the covenant is likely void in its entirety — but that is a litigation outcome, not a plan.

**Error 3 — Severability cuts against you too.** The same severability principle means a court could strike the unlawful *forfeiture* clause and the *no-revocation* clause as distinct unlawful terms while leaving the release, the confidentiality covenant, and the invention trailer enforceable. You cannot assume "the bad parts kill the whole agreement." Language must be fixed on the page, not litigated later.

**Error 4 — "Take the severance and rely on the judge."** This advice asks you to (a) sign a release, (b) accept a contractual forfeiture of $140,000 of **already-vested** bonus, and (c) then breach and litigate — funding your own declaratory-judgment action, absorbing a TRO motion, and asking your new employer to keep an offer open while a court sorts it out. Meanwhile the drafting is designed so Meridian can stop payments *unilaterally, without notice or adjudication*, forcing you to sue for money you already earned. The correct sequence is the opposite: fix the paper **before** signing, when Meridian needs your release and needs enforceable covenants.

**Error 5 — the advice ignores your leverage.** If no deal is signed: you keep the vested bonus and vested equity anyway (Rule 7); Meridian gets **no release** and **no covenants**; and the only thing at stake is the severance. Meridian is buying peace with money it does not otherwise owe. That is a strong position, not a weak one.

**Diligence caveat:** Rule 7 permits forfeiture only if a **separate lawful plan term** expressly makes the compensation unvested. Pull the bonus plan and equity plan documents and confirm in writing that no such term exists (the facts indicate none). Get Meridian to represent that in the agreement.

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## 2. Noncompetition covenant — defective in all four dimensions

| Element | Draft | Lawful ceiling | Fix |
|---|---|---|---|
| Duration | 24 months | 12 months | 12 months, or delete |
| Territory | Worldwide | Alder and Birch (your material responsibility) | Alder and Birch, or delete |
| Business line | Any Meridian division | Industrial sensors only | Exclude medical-device and consumer-electronics lines |
| Role | "Any capacity" | Roles in which you had material responsibility | Product/sales/executive roles for competing industrial sensors |

Because the defects are cumulative, the clause is not reformable and is very likely void. **But note the strategic problem:** a *properly* tailored 12-month covenant (industrial sensors, Alder/Birch, product role) would land squarely on the job you intend to take. Narrowing is therefore not enough for you — you need **deletion or express consent.**

**Primary ask (delete + consent):**

> *Executive is subject to no post-employment restriction on employment or competition. Without limitation, Meridian consents to Executive's employment in the role described in Schedule A and agrees that such employment does not breach this Agreement.*

**Fallback (if a covenant survives), with the same practical effect:**

> *For 12 months after the Separation Date, Executive will not, within States Alder and Birch, hold a product-management, sales, or executive role with responsibility for industrial sensor products or services competitive with those for which she had material responsibility during her final 12 months. This Section does not restrict (a) work for or with any business line that does not compete in industrial sensors, including medical-device and consumer-electronics operations; (b) work outside Alder and Birch; (c) functions not involving competitive industrial sensor products; or (d) the Schedule A role, to which Meridian expressly consents.*

If Meridian insists on a real restraint, price it: **garden leave** — the restricted period runs only so long as Meridian pays full salary, and the restriction lapses automatically if any payment is missed. Delete any "reformation," "the court shall modify," or automatic-tolling clause: reformation is unavailable under Rule 2, and tolling silently extends 12 months into 18.

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## 3. Customer nonsolicitation

Draft flaws: 24 months (double the cap); **all** Meridian customers and prospects across **all three divisions**, including thousands of people you never met; and a bar on **"accepting"** business — which is not a solicitation restraint at all but a de facto noncompete extending beyond Alder and Birch.

**Redline:**

> *For 12 months after the Separation Date, Executive will not directly solicit any Covered Customer for the purpose of providing industrial sensor products or services competitive with those for which she had material responsibility. "Covered Customer" means a customer or actively pursued prospect of the Industrial Sensors division with whom Executive had material business contact, or about whom she received material confidential information, during her final 12 months of employment. Meridian will deliver a written list of Covered Customers within 10 days of the Separation Date; the restriction applies only to listed customers.*
>
> *Nothing in this Section restricts: (i) general advertising, marketing, or trade-show activity not targeted at Covered Customers; (ii) responding to or **accepting** unsolicited inquiries; (iii) business involving products or services outside competitive industrial sensors; (iv) dealings with any person who was already a customer of Executive's new employer; or (v) dealings with any customer that has independently ceased doing business with Meridian.*

Insisting on the customer list matters: it converts a vague restraint into an administrable one and forces Meridian to identify only genuine material-contact accounts.

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## 4. Employee nonsolicitation

Draft flaws: 24 months; covers **"any current or former"** worker company-wide, including people you never met in divisions you never touched; and bars **"hiring or employing,"** which Rule 4 does not permit and which would block your new employer from processing an unsolicited application.

**Redline:**

> *For 12 months after the Separation Date, Executive will not knowingly engage in targeted recruitment of any Covered Employee. "Covered Employee" means a person who, during Executive's final 12 months, was an employee she directly supervised or with whom she worked materially, and who remains employed by Meridian. Nothing restricts: (a) general advertising or public job postings; (b) receiving, considering, or hiring persons who apply without solicitation by Executive; (c) hiring or working with any person not a Covered Employee; (d) hiring any person whose Meridian employment ended before the solicitation; (e) serving as a reference; or (f) actions by Executive's employer in which Executive is not personally involved.*

Delete "former workers" and delete the hiring/employment bar entirely.

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## 5. Confidentiality — duration and exclusions

"Permanent confidentiality for all information learned during employment, including skills and experience" is unlawful in three ways: it applies trade-secret-length protection to ordinary business information (2-year cap), it sweeps in public information, and it purports to confiscate **your general skill and experience** — which is the substance of your career.

**Redline (two-tier plus exclusions):**

> *(a) **Trade secrets.** Executive will not use or disclose Meridian trade secrets for so long as they remain trade secrets under applicable law.*
> *(b) **Other confidential information.** For 24 months after the Separation Date, Executive will not use or disclose non-public, competitively sensitive business information of Meridian obtained during employment.*
> *(c) **Exclusions.** These obligations do not apply to: information that is or becomes public through no breach by Executive; Executive's general knowledge, skill, training, and experience, including industry knowledge; information independently developed without use of Meridian confidential information; information lawfully received from a third party without restriction; and information Executive is legally required to disclose.*
> *(d) **Protected activity.** Nothing prohibits Executive from reporting to or communicating with any governmental agency, participating in an agency proceeding, testifying truthfully, disclosing trade secrets in confidence to counsel or the government, discussing her own compensation and working conditions, or disclosing the terms of this Agreement to her counsel, tax advisors, spouse, and prospective employer's counsel.*

Also add: return-of-property clause with a carve-out permitting you to retain your own compensation records, equity documents, benefit statements, and this Agreement.

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## 6. Post-employment invention assignment

The one-year trailer for anything "relating to Meridian's current or anticipated business" is exactly what Rule 6 forbids: it claims inventions created **after** employment, without Meridian resources, on nothing more than broad industry relatedness. It would also encumber your work at your new employer and make you unhireable in sensors.

**Redline:**

> *Executive assigns to Meridian only inventions she conceived or developed **during employment** using Meridian time, systems, equipment, confidential information, or business opportunities. Meridian has no right, title, or interest in any invention conceived or developed after the Separation Date, and no post-employment disclosure, assignment, or "trailer" obligation applies, provided the invention is not created using Meridian confidential information or trade secrets. Schedule B lists Executive's prior and excluded inventions.*

Delete the one-year trailer, delete the "relates to anticipated business" language, and delete any post-employment disclosure or "hold in trust" obligation.

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## 7. Vested bonus, vested equity, and severance — the money architecture

The single most important structural fix is to **separate earned compensation from consideration for the release and covenants.** Right now Meridian has fused them so it can hold your earned money hostage.

**Redline:**

> **Accrued Obligations (unconditional).** *Regardless of whether Executive signs, revokes, or breaches any provision of this Agreement, Meridian will pay: (i) salary earned through the Separation Date on the next regular payroll date; (ii) the $140,000 annual bonus that vested under the Bonus Plan on December 31, ____, payable February 15, ____; (iii) accrued unused paid time off; and (iv) outstanding expense reimbursements. Executive's vested equity remains fully vested and is not subject to forfeiture, cancellation, repurchase, or clawback, and her exercise and settlement rights continue under the applicable plan. Meridian represents that no plan term makes any of the foregoing unvested or forfeitable on account of post-employment competition or any other post-employment activity. The Accrued Obligations are earned compensation, are not consideration for the Release or the covenants, and are not subject to offset, recoupment, delay, or clawback under any circumstance, including any alleged breach.*

> **Severance (conditioned, permissibly).** *$360,000, payable in 12 equal monthly installments (or, at Executive's election, a lump sum) beginning on the first payroll date after the Release Effective Date, conditioned only on (i) the Release becoming effective and (ii) Executive's ongoing compliance with the covenants as revised. No offset or reduction for other employment or earnings. Meridian will also pay 12 months of COBRA/health continuation premiums.*

Add: continued D&O indemnification and coverage; mutual non-disparagement with a truthful-testimony carve-out; a neutral-reference commitment naming a designated contact; any cooperation obligation capped in hours and reimbursed at an hourly rate.

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## 8. Breach, notice, cure, materiality, adjudication, repayment

The draft — sole discretion, no notice, no cure, no materiality, no adjudication, forfeiture on mere **allegation**, plus repayment — is precisely the "declare any allegation a breach and claw back earned compensation" structure Rule 8 prohibits. Replace it wholesale with a due-process cascade:

> *(a) **Notice.** Before taking any action, Meridian will give Executive written notice describing the alleged breach in specific factual detail.*
> *(b) **Cure.** Executive has 30 days to cure any curable breach; a cured breach is not a breach.*
> *(c) **Materiality.** Only an uncured **material** breach permits any remedy.*
> *(d) **Adjudication.** Meridian may suspend or recover severance only after a court (or agreed arbitrator) of competent jurisdiction determines that an uncured material breach occurred. Pending determination, Meridian may place at issue no more than the unpaid installments attributable to the period of alleged breach; all other payments continue.*
> *(e) **Proportionality.** Any remedy is limited to the severance installments attributable to the period of material breach. There is no forfeiture of, or repayment obligation for, Accrued Obligations, vested bonus, or vested equity, and no liquidated damages or penalty.*
> *(f) **Make-whole.** If no material breach is found, Meridian will pay all withheld amounts within 10 days with interest, plus Executive's reasonable attorneys' fees.*
> *(g) **Equitable relief.** Injunctive relief requires a court order on the ordinary showing; the parties waive any contractual stipulation of irreparable harm or waiver of bond.*
> *(h) **No tolling.** Covenant periods are not extended or tolled by any alleged breach or by any dispute, absent court order.*
> *(i) **Fees.** Prevailing-party fee shifting, mutual.*

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## 9. Release effectiveness and revocation

"Effective immediately on signing, with no revocation period" is unlawful and, ironically, is *Meridian's* problem as much as yours — a release that never became effective is a release Meridian cannot rely on. Use that to trade.

**Redline:**

> *Executive has 21 days to consider this Agreement and may consult counsel. For seven days after signing, Executive may revoke by delivering written notice to [name/address/email]. The Release becomes effective on the eighth day after signing if not revoked (the "Release Effective Date"). Severance is payable only after the Release Effective Date. Revocation does not affect Meridian's obligation to pay the Accrued Obligations. Nothing in this Agreement delays payment of any earned compensation pending the Release Effective Date.*

**Release scope carve-outs to add:** vested benefits and equity; the Accrued Obligations; indemnification and D&O coverage; claims arising after the signing date; unemployment and workers' compensation claims; the right to enforce this Agreement; the right to file with or participate in proceedings before any government agency (money-recovery waiver acceptable except where non-waivable). Ask for a **mutual** release; at minimum, a company representation that it is aware of no claims against you.

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## 10. Prioritized redline package

**Tier 1 — walk-away items (no signature without these)**
1. **$140,000 vested bonus paid February 15 and vested equity untouched**, unconditional, never subject to clawback, expressly not consideration for the release.
2. **Delete the noncompete**, with express Schedule A consent to the industrial-sensors product role in Alder and Birch (fallback: 12 months / Alder-Birch / industrial sensors only / defined roles, *plus* Schedule A consent, *plus* garden-leave pay).
3. **Delete the sole-discretion forfeiture and clawback**; substitute notice → 30-day cure → materiality → adjudication → proportionate suspension of severance only.
4. **Seven-day revocation and eighth-day effectiveness**; earned pay not delayed by the release.

**Tier 2 — must be corrected, but tradeable in detail**
5. Customer nonsolicit: 12 months, material-contact Industrial Sensors customers/active prospects only, delete "accepting," written customer list.
6. Employee nonsolicit: 12 months, targeted recruitment only, direct reports/material colleagues only, delete "former," delete hiring/employment bar, general-advertising carve-out.
7. Confidentiality: trade secrets while trade secrets / other confidential info 24 months / full statutory exclusions / protected-activity carve-out; delete "skills and experience."
8. Inventions: during-employment scope only; delete the one-year "relates to the business" trailer.

**Tier 3 — value capture**
9. 12 months' COBRA; no mitigation offset; lump-sum election.
10. Mutual non-disparagement; agreed reference; continued indemnification/D&O.
11. Mutual prevailing-party fees; no tolling; no stipulated irreparable harm; delete any reformation clause; convenient forum and Alder/Birch governing law.
12. Written confirmation that no bonus- or equity-plan term makes any vested amount forfeitable.

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## 11. Concrete negotiating position

**Opening posture to Meridian:** *"Ava will sign a clean, enforceable agreement today. She will not pay you money she has already earned for the privilege of doing so."*

**What Ava affirmatively offers** — and this is real value, because a void covenant protects Meridian not at all:
- Full trade-secret protection, perpetual; 24 months on other confidential information.
- A 12-month nonsolicitation of the industrial-sensor customers she personally served in Alder and Birch, off an agreed list.
- A 12-month no-targeted-recruitment commitment covering her direct reports and close colleagues.
- Return of all property; reasonable, capped transition cooperation; mutual non-disparagement; a general release effective on the eighth day.

**What Ava requires in exchange:** no bar on working (or written consent to the Schedule A role); the $140,000 bonus paid February 15 and vested equity untouched, both immune from clawback; and enforcement only through notice, cure, materiality, and neutral adjudication, with remedies limited proportionately to unpaid severance.

**Leverage to state plainly (once, calmly):** As drafted, the noncompete is void and cannot be judicially rewritten; the vested-bonus forfeiture is unenforceable; and the release, lacking a revocation period, may never take effect — meaning Meridian could pay 12 months of salary and receive neither covenants nor peace. Meridian's rational trade is narrow-but-enforceable protection plus a valid release, in exchange for leaving earned compensation alone.

**BATNA if Meridian refuses Tier 1:** Do not sign. You retain the $140,000 vested bonus and vested equity by operation of the compensation rules; you are subject to no post-employment covenants under this draft; and you begin the new role on schedule. The only forgone item is the $360,000 severance — which is not worth trading for a forfeitable bonus, an unenforceable-but-litigable work ban, a one-year invention trailer over your new employer's roadmap, and a clawback trigger Meridian controls unilaterally. Preserve that option expressly: any deadline Meridian imposes should be met with a counter-signature package, not a signature.