EX-10.1
2
h28081exv10w1.htm
EMPLOYMENT AGREEMENT - XXXXX XXXXXXX
Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (“Agreement”) is by and between I-Sector Corporation, a Delaware
corporation with principal offices at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000 (“Company”) and
Xxxxx X. Xxxxxxx, an individual residing at 00000 Xxxxxxxx Xxx, Xxxxxxx, XX 00000 (“Employee”) and
is effective April 4, 2005.
In consideration of Employee’s employment or continued employment in a new position by Company
and any additional compensation or benefits that Company may now or from time to time bestow upon
Employee, Employee and Company agree as follows:
1. Employment. Company hereby employs or continues to employ Employee subject to the terms
hereof, and Employee hereby accepts such employment upon such terms. As used in this Agreement, the
word “Employee” shall be deemed to include, but not be limited to, Company’s Sales Agents and Sales
Managers.
2. Compensation. Employee shall be compensated by Company as set forth in Attachment “A”
attached hereto and made a part hereof. Any and all compensation, bonus programs, commission
programs and stock incentive programs which are paid or which arise incident to the employment
relationship created by this Agreement, other than the one-time cash payment described hereinafter,
are discretionary and may be changed from time to time at the sole discretion of Company.
3. Duties, Responsibilities. Employee shall function in whatever capacity(ies) Company shall
assign, whether for Company or its subsidiary(ies) and shall report to such executive officer, or
other designated superior of Employee, of Company or such subsidiary(ies) as may be designated from
time to time. Employee shall perform the usual functions of such position(s) and functions as
directed by such executive officer or superior from time to time. Employee shall truthfully,
completely and accurately make, maintain and preserve all records and reports that Company may from
time to time request or require. Employee shall also perform other duties for Company and its
subsidiary(ies) as Company may otherwise reasonably order and direct through such executive officer
and/or superior. Employee’s employment shall be subject to the policies of Company now or hereafter
adopted.
4. Outside Business Interests. Employee agrees to faithfully devote all of his/her time,
energy, and skill to his/her employment with Company on a full-time basis for at least forty (40)
hours per week, Mondays through Fridays of each successive calendar month, but exclusive of
holidays set by Company and vacation periods in accordance with Company’s policies. Employee shall
not, while employed hereunder, be engaged in any other business activity, unless consented to in
writing by Company. Notwithstanding the foregoing, Employee may engage in passive personal
investments that do not interfere with the business and affairs of Company or interfere with the
performance of Employee’s duties to Company. Employee represents and warrants to Company that this
Agreement, the performance of his/her obligations under this Agreement or the employment
relationship between Company and Employee under this Agreement do not and will not violate or
conflict with any non competition (as pertaining to being employed by a competitor),
non-solicitation (as pertaining to customers), non-interference (as pertaining to employees,
agents or servants) or confidentiality agreement (as pertaining to trade secrets and other
confidential information), or any other obligation to which Employee is subject. Employee also
represents and warrants to Company that he/she will not use the trade secrets or other confidential
information of former employers or others in connection with his/her employment by Company.
5. Fiduciary Duties. Employee acknowledges and agrees that Employee owes a fiduciary duty
of loyalty, fidelity and allegiance to act at all times in the best interests of Company. Employee
agrees to not act or fail to act in any manner that would injure the business, interests, or
reputation of Company or any of its Affiliates (as defined below in paragraph 6). Additionally,
Employee agrees to immediately disclose to an executive officer or Employee’s immediate superior
all information and business opportunities pertaining to the business of Company and any of its
Affiliates learned of by Employee while employed by Company and not to appropriate for Employee’s
benefit or that of any third party such opportunities or information.
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6. Dishonesty. If at any time Employee becomes aware, or believes, that any other employee,
agent or servant of Company, or any third party, is or appears to be (a) removing, concealing,
transferring or using any property or funds of Company for the benefit of anyone other than Company
or is otherwise not authorized by Company to do so, or (b) divulging, providing or otherwise
disseminating in any manner not authorized by Company any of Company’s Confidential Information (as
defined in the Confidentiality, Development and Non-Interference Agreement (“Confidentiality
Agreement”) to be executed by Employee concurrently herewith) to any third person not authorized by
Company to possess such Confidential Information, Employee shall immediately communicate his/her
knowledge or belief as to such matters to an executive officer of Company or to his/her immediate
superior.
7. Restrictive Covenants. Employee agrees that the following covenants are reasonable and
necessary to protect Company’s interests, including but not limited to its trade secrets and other
confidential information, and therefore agrees to the following covenants which are agreed to be
ancillary to the Confidentiality Agreement to be executed by Employee concurrently herewith.
Employee agrees as follows:
| | (a) | | That certain Confidentiality Agreement entered into by and between Company and Employee
(as of dates below) is incorporated herein and hereat by reference for all pertinent
purposes and such Confidentiality Agreement and all of its terms and provisions shall be
deemed a part hereof and shall be enforceable hereunder separate and distinct from its
enforceability as a separate agreement, e.g., it shall be enforceable as a separate and
distinct agreement as well as being enforceable as a part hereof; and |
| | | | Employee further agrees that he/she will not, while at any time employed by Company and for
a period of eighteen (18) months following the termination of such employment, whether as
an individual, or in any capacity, directly or indirectly: |
| | (b) | | In competition with Company solicit or sell or participate in any way concerning a sale
of products or services similar to Company’s products or services to any customer or client
which Employee at any time solicited or sold for Company; and |
| |
| | (c) | | Induce or attempt to induce any distributor, vendor, representative, agent or contractor
of Company to terminate or modify its business relationship with Company; |
| |
| | (d) | | Induce or attempt to induce any of (i) Company’s customers or clients or (ii)
individuals or entities who/which have been customers or clients of Company within the 12
months preceding Employee’s termination of employment with Company, to terminate or in any
way modify its business relationship with Company; and |
| |
| | (e) | | Solicit, divert or take away, or attempt to solicit, divert or take away, from Company,
any individuals or entities who (i) are Company’s customers or clients or (ii) who/which
have been customers or clients of Company within the 12 months preceding Employee’s
termination of employment with Company; and |
| | | | Employee further agrees that: |
| | (f) | | In the event any court of competent jurisdiction at any time determines that all or any
part of the above and foregoing restrictive covenant(s) to be unenforceable, in whole or in
part, then in that event Employee hereby waives (and covenants not to xxx Company) whatever
cause(s) of action he or she might otherwise have (whether under any antitrust law(s) or
otherwise) against Company because of its attempt to enforce same; and |
| |
| | (g) | | Enforcement of the above paragraphs 7 (b) through (e), inclusive, is the only practical
means of enforcing paragraph 7(a), above, and of enforcing the Confidentiality Agreement.
Employee agrees that enforcement of paragraphs 7 (b) through (e), inclusive, is necessary to |
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| | | | protect Company’s goodwill and other business interests. Paragraphs 7 (a) through (e),
inclusive, shall be deemed ancillary to the Confidentiality Agreement. Employee agrees that
all of the provisions of this Agreement and the Confidentiality Agreement are valid and
enforceable as written and according to their terms. For purposes of this Agreement, the
following definitions shall apply: (a) “Company” shall be deemed to mean and refer to the
entity named in the first paragraph hereof; (b) “Parent” shall be deemed to mean and refer
to any corporation which, directly or indirectly, controls Company or the referred to
subsidiaries through ownership or control of at least 80% of the authorized, issued and
outstanding shares of the common voting stock of Company or each of such subsidiaries; (c)
the word “Affiliates” includes Company’s Parent (if any) and subsidiaries of Company or
Company’s Parent (if any). The obligations of Employee as to this paragraph 7 hereof shall
apply to Company and its Affiliates, in which case such Affiliates shall be deemed to be
third party beneficiaries of such paragraph. The obligations of Company hereunder shall not
apply to such Parent and/or subsidiaries. |
8. Assignment. This Agreement applies to Company and its subsidiaries, Affiliates,
successors, assigns or its associated companies. Company may assign this Agreement at any time
without notice (but Employee cannot). This Agreement is personal to Employee and no individual or
entity shall have any interest in same except Employee, personally, on the one hand, and Company
and its subsidiaries, Affiliates, successors, assigns or its associated companies, on the other
hand.
9. Savings Clause — Non-Waiver. The failure of Company to at any time enforce any provision
hereof shall never be construed to be a waiver of such provision or of the right of Company to
enforce each and every provision hereof at any time. In the event any paragraph, provision or
clause, or any combination of same hereof shall be found or held to be unenforceable at law or in
equity, or under any ordinance, statute or regulation, such finding or holding shall not in any way
affect the other paragraphs, provisions and clauses which shall remain in full force and effect.
10. Attorney’s Fees — Venue. Employee agrees to pay Company its actual attorney’s fees and
out-of-pocket costs (including all travel expense of counsel and witnesses) which Company incurs by
virtue of Employee’s employment by Company, including any litigation by which Company seeks to
enforce any provision hereof. This Agreement shall be governed by the internal laws, and not the
law of conflicts, of the State of
Texas, or, at Company’s option, governed by the internal laws of
the state or states where this Agreement, and/or any of its provisions, may be at issue in any
litigation involving Company, in all respects. Venue respecting any litigation arising from
this Agreement and/or Employee’s employment with Company shall, at Company’s option, be properly
laid only in a court of competent jurisdiction in Xxxxxx County,
Texas. Each party hereto
acknowledges and agrees that it has had the opportunity to consult with its own legal counsel in
connection with the negotiation of this Agreement and that it has bargaining power equal to that of
the other party hereto in connection with the negotiation, execution and delivery of the Agreement.
Accordingly, the parties hereto agree that the rule of contract construction that an agreement
shall be construed against the drafter shall have no application in the construction or
interpretation of this Agreement.
11. Termination. Employee’s employment by Company may be terminated at any time by either
party, with or without cause. No severance pay or benefits will be paid upon termination of
employment under this Agreement. The covenants and agreements of Employee set forth in paragraph 7
are of a continuing nature and shall survive the expiration, termination or cancellation of this
Agreement and Employee’s employment with Company regardless of the reason(s) for such
termination or cancellation.
12. Consideration For This Agreement. In addition to the employment, or continued
employment, of the Employee by Company, and in addition to the mutual covenants and promises of the
parties contained herein, Company shall, contemporaneous with the execution of this Agreement by
Employee, or within thirty days thereafter, pay to Employee additional and special consideration of
a one-time cash payment of $100.00 as additional and special consideration to support the covenants
and agreements of Employee contained herein. Such $100.00 is paid for both this Agreement and the
Confidentiality Agreement.
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13. Miscellaneous. Employee has no authority, express or implied, to assume or create any
obligation on behalf of or in the name of Company. Employee shall have no authority to make
representations, warranties or guarantees not herein stated (and Company makes no warranty with
respect to any product or service sold by it except as otherwise specifically agreed in writing)
unless otherwise authorized, in writing, by Company. Employee may not make any allowances or
adjustments respecting customers without the written authorization of Company, nor may Employee
bind Company to any contract of employment, or otherwise, without Company’s consent; nor may
Employee endorse or cash Company’s checks or commercial paper; nor may Employee maintain any bank
account in the name of Company. Employee hereby indemnifies and holds harmless Company from any
and all liability, cost or damage which Company may suffer by Employee’s breach of this paragraph
13 and/or which Company may suffer because of any act or omission of Employee.
14. Defamation and Privacy. Employee shall refrain, both during and after termination of the
employment relationship between Company and Employee, from publishing, uttering or otherwise
disseminating any oral or written statements about Company or its officers, directors, employees,
agents or representatives that are slanderous, libelous, or otherwise defamatory; or that disclose
private or confidential information about Company or its business affairs, officers, directors,
employees, agents or representatives that Employee knows or should know is materially injurious to
Company; or that constitute an intrusion into the seclusion or private lives or business affairs of
Company or its officers, directors, employees, agents or representatives that Employee knows or
should know is materially injurious to Company; or that give rise to unreasonable publicity about
the private business affairs of Company or its officers, directors, employees, agents or
representatives; or that place Company or any of its officers, directors, employees, agents or
representatives in a false light before the public; or that constitute a misappropriation of the
name or likeness of Company or its officers directors, employees, agents or representatives. A
violation or threatened violation of this prohibition may be enjoined by any court of competent
jurisdiction. The rights afforded Company under the provision of this paragraph 14 are in
addition to any and all rights and remedies otherwise afforded by law or by this Agreement.
15. Entire Agreement. This Agreement (including all written amendments and/or
modifications hereto and all documents ancillary hereto) constitutes the entire agreement and
understanding between the parties and it is expressly agreed that no representations, promises,
warranties or understandings, express or implied, other than set forth herein or referred to
herein, shall be binding on either party. The Confidentiality Agreement is ancillary to this
Agreement. None of the provisions hereof shall be waived, altered or amended unless in writing
signed by the parties.
16. Employee’s Certification. Employee HEREBY CERTIFIES THAT:
| | (A) | | EMPLOYEE RECEIVED A COPY OF THIS AGREEMENT AND
THE CONFIDENTIALITY AGREEMENT FOR REVIEW AND STUDY BEFORE HE/SHE WAS ASKED
TO EXECUTE THEM; |
| |
| | (B) | | EMPLOYEE HAS READ SUCH AGREEMENTS CAREFULLY; |
| |
| | (C) | | EMPLOYEE HAS HAD SUFFICIENT OPPORTUNITY BEFORE
HE/SHE EXECUTED SUCH AGREEMENTS TO ASK QUESTIONS ABOUT NOT ONLY COMPANY, BUT
ALSO THE PROVISIONS OF SUCH AGREEMENTS AND THAT IF HE/SHE ASKED SUCH
QUESTIONS HE/SHE RECEIVED COMPLETE AND SATISFACTORY ANSWERS TO SAME; |
| |
| | (D) | | EMPLOYEE HAS BEEN AFFORDED THE OPPORTUNITY TO DISCUSS AND
REVIEW THIS AGREEMENT AND THE CONFIDENTIALITY AGREEMENT WITH AN
ATTORNEY OF HIS/HER CHOICE; |
| |
| | (E) | | EMPLOYEE UNDERSTANDS WHAT HIS/HER RIGHTS ARE UNDER THE
AGREEMENTS AS WELL AS HIS/HER OBLIGATIONS, ESPECIALLY THE ANCILLARY COVENANTS;
AND |
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| | (F) | | EMPLOYEE HAS READ AND UNDERSTANDS EACH AND EVERY PROVISION OF THE
AGREEMENTS AND DOES HEREBY ACCEPT AND AGREE TO THE SAME. |
IN WITNESS WHEREOF, Employee has, on the date set forth below, affixed his/her hand and
Company has caused this Agreement to be executed by a duly authorized officer, on the date set
forth below.
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Attachment “A”
To
Employment Agreement
Salary shall be $13,333.33 per month, payable in accordance with Company’s standard pay
policies and procedures, which currently provide for a semi-monthly payroll period. Pay shall
be prorated for any partial pay period, if any.
| | 1. | | Bonus of up to 20% of annual salary based on the following: |
| | a. | | Up to 10% of total annual salary (paid pro rata from start date) if the
Company achieves net profit per share of $0.40 for its 2005 year, with the net
profit per share used to determine this bonus excluding any special non-cash
charges to net earnings as determined at the sole discretion of the compensation
committee of the board of directors. |
| |
| | b. | | 10% of annual salary if the Company accomplishes all of the below for its 2005 year: |
| | i. | | Timely filing of significant required
SEC filings, with “significant” to be determined by the
compensation committee of the board of directors. |
| |
| | ii. | | A clean audit opinion, and no material weaknesses in the audit report. |
| |
| | iii. | | Development of scope, framework and budget for Xxxxxxxx-Xxxxx compliance |
| | 2. | | Equity participation as set forth below. |
| | a. | | Initial stock option grant for 30,000 shares of the common stock of
I-Sector, with exercise price equal to price on the date of grant (first day of
employment), with 1/5 vesting each year for five years. |
| |
| | b. | | An opportunity for an additional stock option grant for up to 20,000
shares on 4/1/06 and up to 20,000 shares on 4/1/07 based on attainment of annual
bonus measurement goals for previously completed calendar year. |
| | 3. | | Severance payment equal to three months salary if employment with the
Company is terminated subsequent to a change of control of the company. |
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CONFIDENTIALITY. DEVELOPMENT AND NON-INTERFERENCE AGREEMENT
THIS AGREEMENT (“Agreement”) is by and between I-Sector Corporation, Inc., a Delaware
corporation with principal offices at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000 (“Company”) and
Xxxxx X. Xxxxxxx, an individual residing at 00000 Xxxxxxxx Xxx, Xxxxxxx, XX 00000 (Employee”) and
is effective April 4, 2005
In consideration of Employee’s employment or continued employment by Company and any
additional compensation or benefits that Company may now or from time to time bestow upon
Employee, Employee and Company agree as follows:
1. Company Shall Provide Confidential Information. To the extent necessary to perform his or
her duties hereunder, Company shall provide to and/or will give Employee access to pertinent
Confidential Information (defined below) of Company. In addition, because of the nature of
Employee’s duties and responsibilities to Company, Employee from time to time will have access or
be exposed to certain other Confidential Information of Company.
2. Employees Who Sell Company’s Products and Services. As used in this Agreement, the word
“Employee” shall be deemed to include, but not be limited to, Company’s Sales Agents and Sales
Managers. In the event Employee deals, in any way, with Company’s customers, Employee agrees that
the empathy, rapport and goodwill (collectively “goodwill”) he/she develops with Company’s
customers are extremely valuable and necessary for the sale(s) of Company’s products and services
to such customers and shall be deemed to be protectable and proprietary interests of Company and
not of Employee.
3. Company’s Confidential Information. Employee agrees that all of Company’s Confidential
Information, whatever its nature and/or form and whether obtained by Employee orally, by
observation, by exposure to customers or other persons, from written materials or otherwise, shall
at all times be the exclusive and confidential property of Company and shall be at all times
regarded, treated and protected as such by Employee in accordance with this Agreement. Further,
Employee agrees that Company’s Confidential Information of which he/she learns at any time shall be
deemed to have been provided by Company to Employee, in confidence, irrespective of whether or not
Company provided same to Employee or whether prepared, discovered, developed or contributed to,
wholly or in part, by Employee or any other individual or entity during Employee’s employment with
Company or prior to such employment with Company. Employee agrees that such Confidential
Information is not only the proprietary and protectable property of Company, but that it shall be
treated and kept as secret by Employee at all times and any unauthorized use and/or disclosure of
same, or any part thereof, will constitute a breach(es) of this Agreement and will constitute a
breach(es) of Employee’s fiduciary duty to Company regarding the Confidential Information and will
constitute a breach(es) of the confidential relationship between Company and Employee regarding the
Confidential Information. Employee agrees that all of Company’s Confidential Information, including
but not limited to, the specific items listed in paragraph 3, below, is not known to Company’s
competitors and such competitors do not use such specific information in their business. Employee
further agrees that none of the specific items listed in paragraph 3, below, are matters of public
knowledge or of general knowledge in the industry in which Company conducts its business; Employee
agrees that none of such specific items are readily ascertainable by any competitor of Company by
reasonable and ordinary means; Employee agrees that Company’s Confidential Information is
proprietary to, about or created by Company and gives Company some competitive business advantage
or the opportunity of obtaining such advantage. Employee agrees that the unauthorized disclosure
or use of Company’s Confidential Information might be detrimental to the interests of Company.
Employee agrees that Company’s Confidential Information is not typically disclosed by Company to,
or known by third parties who are not employed by Company. Employee agrees that Company’s
Confidential Information also includes, but is not limited to, information known by Employee to be
considered confidential by Company, or from all the relevant circumstances considered confidential
by Company, or from all the relevant circumstances should reasonably be assumed by Employee to be
confidential and proprietary to Company. Employee agrees that Company utilizes continuing and
effective means of preserving
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the secrecy of its Confidential Information items, such as, but not limited to, having its
Employees enter into confidentiality agreements such as this Agreement, provided, however, that
failure to xxxx any document “confidential,” or with word(s) of similar import, shall not affect
the confidential nature of such document or the information contained thereon. Employee agrees that
Company’s Confidential Information, which may be written, oral or otherwise, includes, but is not
limited to:
| | (a) | | Work product resulting from or related to work or projects performed or to be performed
for Company or for customers or clients of Company, including but not limited to data bases,
draft and other non-public written documents, the interim and final lines of inquiry,
hypotheses, research and conclusions related thereto and the methods, processes,
procedures, analyses, techniques and audits used in connection therewith; |
| |
| | (b) | | Computer software of any type or form in any stage of actual or anticipated research and
development, including but not limited to programs and program modules, routines and
subroutines, processes, algorithms, design concepts, design specifications (design notes,
annotations, documentation, flowcharts, coding sheets, and the like), source codes, object
codes and load modules, programming, program patches and system designs; |
| |
| | (c) | | Information relating to the Company’s proprietary rights prior to any public disclosure
thereof, including but not limited to the nature of the proprietary rights, production data,
technical and engineering data, test data and test results, the status and details of
research and development of products and service, and information regarding acquiring,
protecting, enforcing and licensing proprietary rights (including, without limitation,
patents, copyrights and trade secrets); |
| |
| | (d) | | Internal Company personnel and financial information, lists or other documents which
identify vendor names and other vendor information (including vendor characteristics,
services and agreements), information concerning the identification and nature of goods or
services provided by vendors, purchasing and internal cost information, internal service and
operational manuals, and the manner and methods of conducting Company’s business; |
| |
| | (e) | | Business, marketing and development plans, price and price discounting policies and
practices, price and cost data, price and fee amounts, pricing and billing policies, quoting
procedures, marketing techniques and methods of obtaining business, forecasts and forecast
assumptions and volumes, and future plans and potential strategies of Company which have
been or are being discussed; |
| |
| | (f) | | Names, lists or compilations of customers or clients and their representatives,
contracts and their contents and parties, customer or client services, and the type,
quantity, specifications and contents of products and services purchased, leased, licensed
or received by customers or clients of Company; |
| |
| | (g) | | Information provided to Company by any individual or entity; |
| |
| | (h) | | Contracts with, or developed by Company for use with customers, agents, vendors of
Company, or any other individual or entity, including without limitation, the terms and
conditions thereof; |
| |
| | (i) | | Any and all materials printed by or for Company and utilized by Company in any manner
in the conduct of its business; |
| |
| | (j) | | All information generated by computer software utilized by Company in the conduct of |
| |
| | | | its business; |
| |
| | (k) | | Company’s computer data bases and any information going into or coming out of Company’s
computers; |
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| | (l) | | Information concerning Company’s customers, including but not limited to customer
identity, customer needs and products and/or services requirements, specific products and
quantities of same purchased by customers, specific prices paid for Company’s products and
services by customers, specific quantities of Company’s products and services purchased by
customers, commissions paid on the sales made to customers, payment history of customers,
identification of and all information concerning the buyers (purchasing agents) employed by
the customers, histories of customer purchases, all notes or memoranda containing any
customer information, and all information concerning customers, customer lists (which shall
be deemed to mean any printed material containing, relating to or referring to any customer
or customer information), price books, prices, price lists, price calculations, i.e., any
information having to do with the prices Company charges its customers for Company’s
products; |
| |
| | (m) | | Any and all information concerning Company’s personnel, whether sales or in-house
personnel; any and all information concerning commissions and/or other compensation and/or
bonuses paid to Employees; any and all information concerning the effectiveness of, volume
of sales made by, and profitability of sales made by each Company Employee responsible for
making sales; Company’s sales strategies, sales procedures, promotion of sales and sales
proposals and/or bids and/or any information concerning Company’s solicitation for and
sales of its products and services; general price lists, special price lists, e.g., for
“national accounts” or other favored customer accounts; all other information and/or data
relating in any manner to Company and/or its business which is learned of and/or which
comes into the possession of Employee and/or any other Company employee while employed by
Company; all information utilized by Employee and/or any other Company employee while
employed by Company, irrespective of when or through what or whom learned of. Company’s
Confidential Information includes, but is not limited to, information that Employee would
not have learned of but for his/her employment by Company. |
Employee agrees that each, every and all of the above listed specific items of Company’s
Confidential Information are and shall be deemed trade secrets in accordance with the definitions
of trade secrets stated in comment b to the Restatement (First) of Torts § 757 (“Restatement”) and
the Uniform Trade Secrets Act (“UTSA”). Employee further agrees that such trade secrets are and
shall be deemed to be Company’s Confidential Information. Employee agrees that such Confidential
Information shall be protectable by Company as its trade secret(s) and/or confidential information
notwithstanding that, technically, any given specific item of Confidential Information, at issue,
may not satisfy the definition(s) of trade secrets as stated above or as contained in the
Restatement or UTSA. Employee agrees that it is the intent of this Agreement and is the intent of
Employee, and in light of the consideration paid by Company to Employee for his/her entering into
this Agreement, that this Agreement shall be fully enforceable and the specific items of
Confidential Information as stated herein shall be protectable by injunctive relief, among other
remedies, even though such items do not rise to the dignity of trade secret(s) as defined by the
Restatement, UTSA or by any other law(s) of the State of
Texas. Confidential Information shall not
include information publicly known other than as a result of a disclosure by Employee in breach of
this Agreement. The phrase “publicly known” shall mean readily accessible to the public, or others
engaged in the industry(ies) in which Company engages, in a written publication and shall not
include information which is only available by a substantial searching of the published literature
or information the substance of which must be pieced together from a number of different
publications and sources, or by focused searches of literature guided by Confidential Information.
The burden of proving that information is not confidential or secret shall be on the party
asserting such exclusion. For purposes of this Agreement, the following definitions shall apply:
(a) “Company” shall be deemed to mean and refer to the entity named in the first paragraph hereof;
(b) “Parent” shall be deemed to mean and refer to any corporation which, directly or indirectly,
controls Company or the referred to subsidiaries through ownership or control of at least 80% of
the authorized, issued and outstanding shares of the common voting stock of Company or each of
such subsidiaries; (c) the word “Affiliates” includes Company’s Parent (if any) and subsidiaries
of Company or Company’s Parent (if any). The obligations of Employee as to paragraphs 3, 4, 5, 6
and 7 hereof shall apply to Company and its Affiliates, in which case such Affiliates shall be
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deemed to be third party beneficiaries of such paragraph. The obligations of Company under this
Agreement shall not apply to such Affiliates.
4. Covenants of Employee. As a consequence of Employee’s acquisition or
anticipated acquisition of Confidential Information, Employee will occupy a position of trust and
confidence with respect to Company’s affairs and business. Employee acknowledges that Company’s
Confidential Information is/are valuable, special and unique assets of Company, which Company uses
in its business to obtain competitive advantage over its competitors that do not know or use such
information. In view of the foregoing and of the consideration being provided to Employee by
Company for the execution of this Agreement, Employee agrees that it is reasonable and necessary
that Employee make the following covenants. Employee does hereby covenant and agree as follows:
| | (a) | | That he/she will at all times keep in strict confidence, and will not, either directly
or indirectly (other than in the regular course of Company’s business), copy, transfer,
make known, divulge, reveal, furnish, make available for use, disclose, publish, make
available to others, misappropriate or use, at any time, any of Company’s Confidential
Information; and |
| |
| | (b) | | That he/she will safeguard all of Company’s Confidential Information at all times so
that it, or any of it, is not exposed to, or taken by, unauthorized persons, and Employee
shall exercise his/her best efforts at all times to assure such Confidential Information’s
safekeeping, confidentiality and secrecy; and |
| |
| | (c) | | That the prohibitions against Employee regarding Company’s Confidential Information
contained in this paragraph 4, include but are not limited to, disclosing the fact that any
similarity exists between the Confidential Information and information
independently developed by any third party, and Employee understands that such similarity
does not excuse Employee from abiding by his or her covenants or other obligations under
this Agreement. |
| |
| | (d) | | That the prohibitions against Employee’s use, copying or transfer of Confidential
Information includes, but is not limited to, selling, licensing or otherwise exploiting,
directly or indirectly, any products or services (including data bases, written documents
and software in any form) which embody or are derived from Confidential Information, or
exercising judgment in performing analyses based upon knowledge of Confidential
Information. |
| |
| | (e) | | That the certain Employment Agreement entered into by and between Company and Employee
(as of dates below) is incorporated herein and hereat by reference for all pertinent
purposes and such Employment Agreement and all of its terms and provisions shall be
ancillary to this Agreement and shall be deemed a part hereof and shall be enforceable
hereunder separate and distinct from its enforceability as a separate agreement, e.g., it
shall be enforceable as a separate and distinct agreement as well as being enforceable as a
part hereof and shall be deemed to be ancillary to this Agreement. |
5. Return of Confidential Material. Employee shall turn over to Company all originals and
copies of materials containing Confidential Information in the Employee’s possession, custody, or
control upon request or upon termination of the Employee’s employment with Company. Upon
termination of his/her employment with Company, Employee agrees to attend a termination interview
with one of Company’s executive officers to confirm turnover of such materials and to discuss any
questions Employee may have about his/her continuing obligations under this Agreement.
6. Inventions. Any and all inventions, products, discoveries, improvements,
copyrightable works, trademarks, service marks, ideas, processes, formulae, methods, designs,
techniques or trade secrets (collectively hereinafter referred to as Inventions’) made,
developed, conceived or resulting from work performed by Employee (alone or in conjunction with
others, during regular hours of work or otherwise) while Employee is employed by Company and which
may be directly or indirectly useful in, or related to, the business of Company (including .without
limitation, research and development activities of Company), or which are made using any equipment,
facilities,
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Confidential Information, materials, labor, money, time or other resources of Company, shall be
promptly disclosed by Employee to one of Company’s executive officers, and shall be deemed
Confidential Information for purposes of this Agreement, and shall be Company’s exclusive property.
Employee shall, upon Company’s request, execute any documents and perform all such acts and things
which are necessary or advisable in the opinion of Company to cause issuance of patents to,
copyrights for, or otherwise obtain recorded protection of rights to intellectual property for,
Company with respect to Inventions that are to be Company’s property under this Section, or to
transfer to and vest in Company full and exclusive right, title and interest in and to such
Inventions; provided, however, that the expense of securing any such protection of right to
Inventions shall be borne by Company. In addition, Employee shall, at Company’s expense, assist
Company in any proper manner in enforcing any inventions that are to be or become Company’s
property hereunder against infringement by others. Employee shall keep confidential and will hold
for Company’s sole use and benefit any invention that is to be Company’s exclusive property under
this Section for which full recorded protection of right has not been or cannot be obtained.
7. Non-interference With Company’s Employees. During Employee’s employment with Company, and
for a period of 18 months immediately following Employee’s termination (voluntary or otherwise),
Employee shall not, directly or indirectly: (a) induce, or aid others to induce, any Company
employee to terminate his or her employment with Company; (b) induce any Company employee to do, or
not do, as the case may be, anything which violates his/her oral or written
employment agreement
with Company; (c) hire, attempt to hire, contact or solicit with respect to hiring any employee of
Company. Moreover, in recognition of the status of the compensation and effectiveness of Company
employees as Confidential Information, Employee shall not solicit or aid others to solicit Company
employees for, or offer to them, competitive employment. Additionally, Employee agrees not to
interfere with the business of Company in any manner including, without limitation, inducing any
consultant or independent contractor to terminate or modify such person’s relationship with
Company. For purposes of this paragraph 7, “Employee” shall be deemed to mean agents, servants,
representatives and other individuals having an employer/employee relationship with Company or who
had such a relationship with Company within the 12 months preceding the commencement of the
restricted activities of Employee as stated above.
8. Consideration For This Agreement. In addition to the employment, or continued employment,
of the Employee by Company, and in addition to the mutual covenants and promises of the parties
contained herein, Company shall, contemporaneous with the execution of this Agreement by Employee,
or within thirty days thereafter, pay to Employee additional and special consideration of a
one-time cash payment of $100.00 as additional and special consideration to support the covenants
and agreements of Employee contained herein. Such $100.00 is paid for both this Agreement and the
Employment Agreement.
9. Employee’s Certification. Employee HEREBY CERTIFIES THAT:
| | (A) | | EMPLOYEE RECEIVED A COPY OF THIS AGREEMENT AND THE
EMPLOYMENT AGREEMENT FOR REVIEW AND STUDY BEFORE HE/SHE WAS ASKED TO
EXECUTE THEM; |
| |
| | (B) | | EMPLOYEE HAS READ SUCH AGREEMENTS CAREFULLY; |
| |
| | (C) | | EMPLOYEE HAS HAD SUFFICIENT OPPORTUNITY BEFORE HE/SHE
EXECUTED SUCH AGREEMENTS TO ASK QUESTIONS ABOUT NOT ONLY COMPANY, BUT ALSO THE
PROVISIONS OF SUCH AGREEMENTS AND THAT IF HE/SHE ASKED SUCH QUESTIONS HE/SHE
RECEIVED COMPLETE AND SATISFACTORY ANSWERS TO SAME; |
| |
| | (D) | | EMPLOYEE HAS BEEN AFFORDED THE OPPORTUNITY TO DISCUSS AND
REVIEW THIS AGREEMENT AND THE EMPLOYMENT AGREEMENT WITH AN ATTORNEY OF HIS/HER
CHOICE; |
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| | (E) | | EMPLOYEE UNDERSTANDS WHAT HIS/HER RIGHTS ARE UNDER THE AGREEMENTS
AS WELL AS HIS/HER OBLIGATIONS, ESPECIALLY THE ANCILLARY COVENANTS; AND |
| |
| | (F) | | EMPLOYEE HAS READ AND UNDERSTANDS EACH AND EVERY PROVISION OF
THE AGREEMENTS AND DOES HEREBY ACCEPT AND AGREE TO THE SAME. |
IN WITNESS WHEREOF, Employee herewith affixed his/her hand and Company has caused this
Agreement to be executed by a duly authorized officer, all on the day and year below mentioned.
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