206 Raising Capital Employment and Confidentiality Agreements Venture capitalists will also often require key members of the management team to execute certain employment and confidentiality agreements as a condi- tion for the investment. These agreements will define each employee's obliga- tions, his compensation package, the grounds for termination, his obligation to preserve and protect the company's intellectual property, and posttermina- tion covenants, such as covenants not to compete or to disclose confidential information. You'll find a commonly used sample executive employment and confidentiality agreement in the appendix. Contingent Proxy This document provides for a transfer to the venture capitalist of the voting rights attached to any securities held by a principal of the company upon her death. The proxy may also be used as a penalty for breach of a covenant or warranty in the investment agreement. Registration Rights Agreement