Founders’ Non-Compete Clause Samples
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Founders’ Non-Compete. Each Founder hereby covenants and undertakes that he shall devote substantially one hundred percent (100%) of his working time and attention to the business of the Group Companies, and use his best efforts to develop the business and care for the interests of the Group Companies. Each Founder hereby further covenants and undertakes that, during the period when he holds any direct or indirect equity interest in any Group Company and for a further period of twenty four (24) months thereafter, without the prior written consent of the holders of at least 75% of Series E Shares and a majority of the Series D Holders, he shall not, and shall ensure that the companies that such Founder directly or indirectly controls or holds at least three percent (3%) equity interests in (other than the Company and its direct and indirect subsidiaries) do not, directly or indirectly, (i) compete with the business of any Group Company, (ii) induce or attempt to induce any client, customer, supplier, licensee or other business relation of any Group Company to do business with it (other than for the sole benefit of the Group Companies) or to reduce or cease doing business with any Group Company (such business includes providing downloading or online video services, or downloading, online video and storage services provided through cloud technology, or online games, but excludes content resale), or in any way interfere with the relationship between any such client, customer, supplier, licensee or business relation, on the one hand, and any Group Company, on the other hand or (iii) induce or attempt to induce any employee, salesperson or representative of any Group Company to leave the employment of any Group Company, or in any way interfere with the relationship between any Group Company, on the one hand, and any employee, salesperson or representative thereof, on the other hand, unless, in each case of (i), (ii) and (iii), the approval of at least six (6) affirmative votes of the Board, including the affirmative vote of one (1) Xiaomi Director and the Kingsoft Director and at least three (3) affirmative votes of any of the Series D Director, the Morningside Director or the IDG Director, has been obtained by such Founder, provided that, affirmative votes by Directors appointed by such Founder shall not be counted towards the number of affirmative votes of the Board so required.
Founders’ Non-Compete. (a) The Founder covenants that, until the first (1st) anniversary of the initial public offering of the Class A Ordinary Shares of the Company, unless the Founder’s earlier termination of his employment agreement with the Group Companies is duly approved by the Series Preferred Majority, he will devote his full time and attention to the business of the Group Companies and will use his best efforts to develop the business and interests of the Group Companies.
(b) Without the prior written consent of the Series Preferred Majority, so long as the Founder is a director, officer, employee or a direct or indirect holder of Equity Securities of a Group Company and for a period of two (2) years after he is no longer a director, officer, employee or a direct or indirect holder of Equity Securities of a Group Company (the “Restricted Period”), the Founder Parties shall not, and shall cause their Affiliates or Associates (if any) not to, directly or indirectly, own, manage, engage in, operate, control, work for, consult with, render services for, do business with, maintain any interest in (proprietary, financial or otherwise) or participate in the ownership, management, operation or control of, any business, whether in corporate, proprietorship or partnership form or otherwise, that is related to the Principal Business or otherwise competes with any of the Group Companies (a “Restricted Business”); provided, however, that the restrictions contained in this Section 7.10 shall not restrict the acquisition by the Founder, directly or indirectly, of less than 0.2% of the outstanding share capital of any publicly traded company engaged in a Restricted Business.
(c) During the Restricted Period, without the prior written consent of the Series Preferred Majority, he shall not, directly or indirectly, either by himself, or through any of his Affiliates, or in conjunction with or through any other Person:
(i) solicit in any manner any Person who is or has been during the Restricted Period a customer or client of any Group Company for the purpose of offering to such Person any goods or services similar to or competing with any of the businesses conducted by any Group Company; or
(ii) solicit or entice away, or endeavour to solicit or entice away, any employee or officer of any Group Company.