EXHIBIT 10.4
EMPLOYMENT AGREEMENT
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Diamond Technology Partners, Inc. ("Diamond Technology") and Xxxxx X.
Xxxxx ("Employee") enter into this Employment Agreement ("Agreement") dated
November 1, 1995 (the "Effective Date").
In consideration of the agreements and covenants contained in the
Agreement, Diamond Technology and Employee agree as follows:
1. Employment Duties. Diamond Technology shall employ Employee,
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commencing on the Effective Date, as an officer of Diamond Technology and be
identified within the organization as a "Partner." Employee shall have such
responsibilities, duties and authority, consistent with those of an executive
employee, as may be assigned to him/her by Diamond Technology's management,
officers and partners ("Management") and agrees to perform such duties as
Diamond Technology may from time-to-time request. In addition, Employee shall,
at the direction of Management, participate in the administration and execution
of Diamond Technology's policies, business affairs, and operations. Employee
shall perform faithfully the duties assigned to him/her and shall devote his/her
full and undivided time and attention and his/her best efforts to the business
of Diamond Technology.
2. Salary. As compensation for Employee's services, Diamond
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Technology shall initially credit to Employee a level of base compensation at
the annual rate of Five Hundred Thousand Dollars ($500,000): all or a portion
of the Employee's base compensation will be paid to him/her at Diamond
Technology's regular executive payroll intervals, and the balance, if any, will
be deferred subject to various qualifications and conditions as set forth in the
Diamond Technology's Partners' Operating Agreement dated March 22, 1994, as
amended (the "Partners' Operating Agreement"). Employee's base compensation
shall be subject to annual review and may, in accordance with the Partners'
Operating Agreement be adjusted at the time of such reviews or at any other time
or times according to Employee's responsibilities, capabilities and performance.
3. Bonus. Diamond Technology may elect to pay annual bonuses. It
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is presently contemplated that Partners subject to a deferral of a portion of
salary will not be eligible to earn bonuses. The decision to pay any bonuses
and the actual payment of such bonuses, if any, shall be at the sole discretion
of Diamond Technology.
4. Employee Benefits. During the period of his/her employment,
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Employee shall be entitled to participate in such employee benefit plans,
including group pension, life and health insurance and other medical benefits,
and shall receive such other fringe benefits, as Diamond Technology may make
available generally to Partners.
5. Business Expenses. Diamond Technology shall reimburse Employee
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for all reasonable and necessary business expenses incurred by Employee in
performing his/her duties.
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Employee shall provide Diamond Technology with supporting documentation
sufficient to satisfy reporting requirements of the Internal Revenue Service and
Diamond Technology. Diamond Technology's determination as to reasonableness and
necessity shall be final.
6. Non-Disclosure and Non-Competition. Employee acknowledges that
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the successful marketing and development of Diamond Technology's professional
services and products requires substantial time and expense. Such efforts
utilize and generate valuable confidential and proprietary information, of which
Employee will obtain knowledge. As used herein, "Confidential Information"
means any information of Diamond Technology that Diamond Technology considers to
be proprietary and treats as confidential or information of any third party that
Diamond Technology is under an obligation to keep confidential, including, but
not limited to, the following: inventions, products, business strategies, plans,
proposals, deliverables, prospect and customer lists, methodologies, training
materials, computer software, documents, models, source code, designs, know how,
techniques, systems, processes, works of authorship, projects, plans, proposals
and flow charts, and listings of any or all of the foregoing. All Confidential
Information is and shall at all times remain the exclusive property of Diamond
Technology. Confidential Information does not include: (i) information that at
the time of disclosure is in the public domain through no fault of Employee's;
(ii) information received from a third party outside of Diamond Technology that
was disclosed without a breach of any confidentiality obligation; (iii)
information approved for release by written authorization of Diamond Technology;
or (iv) information that may be required by law or an order of any court, agency
or proceeding to be disclosed. Employee agrees to undertake the following
obligations, which he/she acknowledges to be reasonably designed to protect
Diamond Technology's legitimate business interests without unnecessarily or
unreasonably restricting Employee's post-employment opportunities:
(a) Employee agrees that he/she will not at any time, whether
during or after the cessation of his/her employment, reveal to any person or any
entity any of the Confidential Information, except, and only to the extent, as
may be required in the ordinary course of performing Employee's assigned duties
as an employee of Diamond Technology, and Employee agrees to keep secret, and
take all necessary precautions against disclosure of, all Confidential
Information and all matters entrusted to him/her and not to use or attempt to
use any Confidential Information in any manner that may cause injury or loss, or
may be calculated to cause injury or loss, whether directly or indirectly, to
the Company or its clients;
(b) Employee agrees that during his/her employment he/she shall
not take, use or permit to be used any notes, memoranda, reports, lists,
records, drawings, sketches, specifications, software programs, data,
documentation or other materials of any nature relating to any matter within the
scope of the business of Diamond Technology or concerning any of its dealings or
affairs otherwise than for the benefit of Diamond Technology;
(c) Upon cessation of his/her employment relationship with
Diamond Technology, Employee shall deliver to Diamond Technology all
Confidential Information and other materials in his/her possession or delivered
to him/her by Diamond Technology, including but not limited to computer
programs, files, notes, records, memoranda, reports, lists, drawings, sketches,
specifications, data, charts, and other documents, materials and things
("Materials"), whether or not
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containing Confidential Information, prepared by Employee in connection with
his/her employment by Diamond Technology, it being agreed that all Materials
shall be and remain the sole and exclusive property of Diamond Technology;
(d) Without limiting the obligations of paragraph 6(c), Employee
agrees that while Employee is employed by Diamond Technology and for a period of
eighteen months following cessation of his/her employment relationship with
Diamond Technology, he/she will not, whether alone or as owner, partner,
officer, director, consultant, agent, employee independent contractor, or
stockholder of any firm, corporation or other commercial enterprise, directly or
indirectly solicit engagements with: (i) any client of Diamond Technology for
whom Diamond Technology performed services within the one year period preceding
his/her cessation of employment, or (ii) any current client prospect of Diamond
Technology for whom Employee directly or indirectly assisted in the preparation
or submission of a proposal made by Diamond Technology to such client prospect
during the one year period preceding his/her cessation of employment, unless
Diamond Technology acknowledges in writing its intent not to further pursue such
client prospect; Employee shall, however, be permitted to own securities of any
public company not in excess of five percent (5%) of any class of such
securities and to own stock, partnership interests or other securities of any
non-public entity not in excess of five percent (5%) of any class of such
securities, and such ownership shall not be considered to be in competition with
Diamond Technology;
(e) While employed and during the eighteen month period
immediately following cessation of Employee's employment relationship with
Diamond Technology for any reason, Employee shall not, directly or indirectly,
solicit any employee of Diamond Technology to work for any person, partnership
or entity other than Diamond Technology, or engage in any activity that would
cause any employee to violate any agreement with Diamond Technology, or
dissuade, or attempt to dissuade, any such employee from faithfully discharging
such employee's contractual and fiduciary obligations to serve Diamond
Technology's interests with undivided loyalty.
7. Remedies. Employee recognizes and agrees that a breach of any or
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all of the provisions of paragraph 6 will constitute immediate and irreparable
harm to Diamond Technology for which damages cannot be readily calculated and
for which damages are an inadequate remedy. Accordingly, Employee acknowledges
that in addition to any and all remedies at law, Diamond Technology shall be
entitled to specific performance or injunctive or other equitable relief to
prevent the violation of Employee's obligations under this Agreement.
8. Intellectual Property. During the employment period, Employee
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shall disclose immediately to Diamond Technology all ideas, inventions and
business plans that he/she makes, conceives, discovers or develops during the
course of his/her employment with Diamond Technology, including but not limited
to any inventions, modifications, discoveries, developments, improvements,
computer programs, processes, products or procedures (whether or not protectable
upon application by copyright, patent trademark, trade secret or other
proprietary rights) ("Work Product") that: (i) relate to the business of
Diamond Technology or any customer or supplier to Diamond Technology or any of
the products or services being developed, manufactured, sold or otherwise
provided by Diamond Technology or that may be used in relation therewith; or
(ii) result from tasks assigned to
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Employee by Diamond Technology; or (iii) result from the use of the premises or
personal property (whether tangible or intangible) owned, leased or contracted
for by Diamond Technology. Employee agrees that any Work Product shall be the
property of Diamond Technology and, if subject to copyright, shall be considered
a "work made for hire" within the meaning of the Copyright Act of 1976, as
amended (the "Act"). If and to the extent that any such Work Product is found as
a matter of law not to be a "work made for hire" within the meaning of the Act,
Employee expressly assigns to Diamond Technology all right, title and interest
in and to the Work Product, and all copies thereof, and the copyright, patent,
trademark, trade secret and all their proprietary rights in the Work Product,
without further consideration, free from any claim, lien for balance due or
rights of retention thereto on the part of Employee.
Employee agrees that upon disclosure of Work Product to Diamond
Technology, Employee will, during his/her employment and at any time thereafter,
at the request and cost of Diamond Technology, execute all such documents and
perform all such acts as Diamond Technology or its duly authorized agents may
reasonably require: (i) to apply for, obtain and vest in the name of Diamond
Technology alone (unless Diamond Technology otherwise directs) letters patent,
copyrights or other analogous protection in any country throughout the world,
and when so obtained or vested to renew and restore the same; and (ii) to defend
any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.
In the event that Diamond Technology is unable, after reasonable
effort, to secure Employee's signature on any letters patent, copyright or other
analogous protection relating to Work Product, whether because of Employee's
physical or mental incapacity or for any other reason whatsoever, Employee
hereby irrevocably designates and appoints Diamond Technology and its duly
authorized officers and agents as his/her agent and attorney-in-fact, to act for
and on his/her behalf to execute and file any such application or applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of letters patent, copyright and other analogous protection with the
same legal force and effect as if personally executed by Employee.
9. Costs and Expenses of Enforcement. Employee agrees to reimburse
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Diamond Technology for all costs and expenses, including reasonable attorneys'
fees, incurred by Diamond Technology in connection with the enforcement of its
rights under any provision of this Agreement; provided, however, that Diamond
Technology agrees to seek reimbursement only for matters, including acts or
omissions (whether direct or indirect), done knowingly, willfully or
intentionally in disregard of Employee's obligations under this Agreement.
10. Indemnity. Provided that Employee performs all of his duties and
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obligations under this Agreement, Diamond Technology agrees to defend, indemnify
and hold Employee harmless from and against all damages, liability and expenses,
including reasonable attorney's fees, arising as a result of: (a) claims
brought against Employee by his/her latest Employer preceding his/her employment
with Diamond Technology ("Previous Employer") (i) alleging any breach, for the
benefit of Diamond Technology, of Employee's obligations to the Previous
Employer with respect to Confidential Information of the Previous Employer;
(ii) based upon Diamond Technology's hiring of
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Employee; or (iii) that are deemed by Diamond Technology, in its sole
discretion, to be frivolous or harassing; or (b) claims brought by any client of
Diamond Technology alleging the breach of any duty owed by Diamond Technology or
Employee to such client. Notwithstanding the foregoing, Diamond Technology shall
have no indemnification obligations: (x) under clause (a) of the preceding
sentence of this Paragraph 10, or otherwise, in respect of any willful or
intentional misconduct or breach of the Employee's obligations to the Previous
Employer with respect to Confidential Information of the Previous Employer; or
(y) under clause (b) of the preceding sentence of this Paragraph 10, or
otherwise, in respect of any willful or intentional misconduct or breach by the
Employee of the Employee's obligations to Diamond Technology; or (z) arising
from or relating to any Employee action that is outside the scope of his/her
employment.
11. Assignment. Employee acknowledges that the services to be
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rendered pursuant to this Agreement are unique and personal. Accordingly,
Employee may not assign any of his/her rights or delegate any of his/her duties
or obligations under this Agreement. Diamond Technology may assign its this
Agreement to its successors or assigns, or to a subsidiary or to a purchaser or
transferee of all, or substantially all, of the assets of Diamond Technology,
and all covenants and agreements of Employee under this Agreement shall inure to
the benefit of and be enforceable by such successors, assigns, subsidiaries,
purchasers or transferees.
12. Notices. All notices hereunder shall be in writing. Notices
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intended for Diamond Technology shall be sent by registered or certified mail
addressed to Diamond Technology at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, or its current principal office, and notices intended
for Employee shall be either delivered personally to him/her or sent by
registered or certified mail addressed to his/her last known address.
13. Entire Agreement. This Agreement constitutes the entire
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agreement between Diamond Technology and Employee with respect to the subject
matter hereof and supersedes any and all other prior or contemporary oral or
written representations or agreements between the parties regarding such subject
matter; however, it is mutually acknowledged that the parties may enter into a
Partners' Operating Agreement governing the relationships among the Partners,
including certain matters relating to compensation and to the payment of the
deferred portion of base compensation. Subsequent to the Effective Date, this
Agreement specifically supersedes any prior non-disclosure agreement executed by
Employee; provided, however, that the terms and conditions of any such prior
agreement remain in full force and effect for the period between execution of
such agreement and the Effective Date of this Agreement. Neither Employee nor
Diamond Technology may modify this Agreement by oral agreements, promises or
representations. The parties may modify this Agreement only by a written
instrument executed by both parties.
14. Applicable Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Illinois. Diamond
Technology and Employee consent to jurisdiction and venue only in the Circuit
Court of Xxxx County, Illinois, or the Federal District Court for the Northern
District of Illinois.
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15. Severability. Employee acknowledges that the type and periods of
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restriction imposed in the provisions of this Agreement are fair and reasonable
and are reasonably required for the protection of Diamond Technology and the
goodwill associated with the business of Diamond Technology. Each provision
herein shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. If any provision contained in this Agreement
shall for any reason be held to be prohibited by, or invalid under, applicable
law, or to be excessively broad as to scope, activity or subject so as to be
unenforceable at law, such provision shall be construed to be ineffective only
to the extent of such prohibition without invalidating the remainder of such
provision or the remaining provisions of this Agreement or, in the case of a
provision found to be excessively broad, by limiting and reducing such provision
so as to permit such provision to be enforceable to the maximum extent
compatible with the applicable law as it shall then appear.
16. Waiver. The failure of Diamond Technology to exercise any right
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hereunder shall not operate or be construed as a waiver of any right hereunder.
Employee's obligations under this Agreement shall survive the cessation of
employment regardless of the manner of such termination and shall be binding on
Employee's heirs, executors, administrators and legal representatives.
17. No Term of Employment. As revised, nothing in this Agreement
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shall be deemed to create any term of employment, it being expressly understood
and agreed that Employee's employment is at will and that either party may
terminate such employment at any time.
18. Charitable Contributions.
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(a) Effective April 1, 1995, Employee will contribute in each
calendar year during his/her employment with Diamond Technology, at least two
percent (2%) of Employee's gross base compensation in effect for the then
current calendar year, to charities approved by the Operations Committee (as
defined in the Partners' Operating Agreement). All such contributions will be
made pursuant to policies established from time to time by the Operations
Committee. Employee authorizes Diamond Technology to make any deductions,
including, without limitation, periodic deductions, from base compensation
payable to Employee, in accordance with such policies.
(b) The Operations Committee will approve charities on an ongoing
basis from time to time and will publish the list of approved charities.
Employee may request approval for charities not already on the list of approved
charities from the Operations Committee no later than thirty (30) days prior to
the end of any calendar year for contributions made during that year.
(c) Diamond Technology will match, up to two percent (2%) of
Employee's gross base compensation, the amount of any contributions made by, or
directed to be made on behalf of, the Employee to any colleges or universities
where Diamond Technology recruits or intends to recruit for new employees. The
Operations Committee will maintain and publish a list of such colleges and
universities. The Operations Committee may from time to time limit or eliminate
Diamond Technology's matching contribution obligation if it determines that to
do so would be in the best business interests of Diamond Technology.
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19. Acknowledgment. Employee acknowledges that he/she has read and
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understood, and accepts, the provisions of this Agreement.
EMPLOYEE
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Date: November 1, 1995
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DIAMOND TECHNOLOGY PARTNERS, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxx
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Date: February 14, 1996
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