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EXHIBIT 10.6
AGREEMENT BETWEEN THE COMPANY AND XXXXX X. XXXXX
THIS AGREEMENT is made and entered into on __________________,
______, between Data Dimensions, Inc. (hereinafter "Employer" or the "Company")
and Xxxxx X. Xxxxx (hereinafter "Employee"). In consideration of the mutual
covenants set forth hereinafter, the parties hereto agree as follows:
AGREEMENT
1. Engagement. Employer hereby agrees to employ Employee and Employee hereby
agrees to be employed in the capacity of President and Chief Executive Officer
(hereinafter "President and CEO") for the terms and on the conditions stated
herein.
2. Term of Employment. Employee's employment under this Agreement shall
commence on December 7, 1998 and shall terminate when either party terminates
this Agreement pursuant to the provisions of Paragraph 7 herein.
3. Duties.
(a) Employee shall be employed as President and CEO on a full-time
basis. As President and CEO, Employee shall perform at all times, faithfully,
industriously, and to the best of his ability, all duties and functions
consistent with the offices of President and CEO. Employee shall perform his job
duties subject to the general supervision, orders, advice and direction of the
Board of Directors. Employee also agrees to abide by any general employment
guidelines or policies adopted by Employer as they may be implemented and/or
amended from time to time.
(b) During his employment with Employer, Employee also shall be a
member of the Company's Board of Directors. Upon termination of Employee's
employment for any reason, Employee's position as a member of the Board of
Directors shall also automatically be terminated, unless the Board of Directors
determines otherwise.
(c) During the term of Employee's employment under this Agreement,
Employee may engage in other business activities or on a volunteer basis in
religious, charitable or other community activities, provided that Employee
provides advance notification to the Board of Directors of each such activity
and that such activities do not negatively reflect on Employer or impair or
otherwise negatively affect Employee's ability to fulfill his duties under this
Agreement, including the Employee Confidentiality and Non-Competition Agreement,
executed on even date and incorporated herein by reference and attached hereto
as Exhibit 1. If Employee engages in any such business, religious, charitable or
other community activity that in the determination of the Board of Directors, or
designee, reflects negatively on Employer or impairs or otherwise negatively
affects Employee's ability to fulfill his duties under this Agreement, Employee
shall immediately cease participating in such activity at the request of the
Board of Directors or designee.
4. Relocation Expenses. Employer shall provide comprehensive relocation
assistance to employee and his family for their move from Princeton Junction,
NJ, to the Bellevue, WA area. Employer shall reimburse Employee for all actual
costs associated with the sale of Employee's residence in New Jersey, the
acquisition of a new residence in Washington, and the relocation of his family's
personal property to Washington, such costs not to exceed seventy-five thousand
dollars ($75,000.00). Employer shall also provide for reasonable accommodations
for Employee and his family for any temporary living arrangements as may be
necessary through February 1, 1999. In addition, Employer shall provide federal
and state income tax protection for any additional income taxes due as a result
of Employee's relocation and the reimbursements and payments described above.
5. Compensation.
(a) As salary for the services to be rendered by the Employee to
Employer pursuant to this Agreement, Employer hereby agrees to pay the Employee
a monthly gross salary of twenty-nine thousand one hundred sixty-six and 66/100
Dollars ($29,166.66) (hereinafter "Base Salary"), minus lawful withholdings and
deductions, payable according to Employer's normal payroll practices and
schedule.
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(b) In addition to the Base Salary above, Employee may receive
additional performance-based bonuses up to three hundred fifty thousand and
00/100 Dollars ($350,000.00) annually, all such payments to be made based on a
payment schedule and bonus criteria that shall be established by mutual written
agreement between Employee and Employer no later than fifteen (15) business days
after the start of each fiscal year.
(c) If and provided that Employee is still employed with the Company
sixty (60) days after he commences employment, Employee shall also receive a
one-time signing bonus of ninety-two thousand and 00/100 Dollars ($92,000.00),
minus lawful withholdings and deductions, on that date.
6. Employee Benefits.
(a) Employee shall be eligible for employee benefits, including, if
provided to other executive employees, medical, dental, disability insurance,
paid sick leave, and vacation according to the terms provided by the Employer.
Such benefits may be amended or discontinued by Employer at any time.
(b) Employer and Employee agree that in addition to the compensation
provided for above, Employee shall be eligible to accumulate equity in the
Company while he is employed as follows:
(i) Upon commencement of his employment, Employee shall be
granted a nonqualified stock option exercisable for three hundred fifty
thousand (350,000) shares of the Company's common stock, exercisable at a
per share price equal to the closing price of the Company's common stock as
reported by the NASDAQ National Market at the close of business on the
business day immediately preceding the date Employee's employment with
Employer commences. Such options shall become exercisable as to 87,500
shares on the first anniversary of the date of granting and as to an
additional 87,500 shares on each of the second, third and fourth
anniversaries; provided that if Employee's employment is terminated for any
reason, other than death or disability (as defined by Section 7(b) below),
prior to the end of the four year period, Employee shall be entitled only
to exercise such options as to those shares that have vested at the end of
the immediately prior full year of employment.
(ii) Upon commencement of his employment, Employee shall be granted
an additional non qualified stock option exercisable for fifty thousand
(50,000) shares of the Company's common stock, exercisable at a per share
price equal to the closing price of the Company's common stock as reported
by the NASDAQ National Market at the close of business on the business day
immediately preceding the date Employee's employment with Employer
commences. Such option shall become fully exercisable on the first
anniversary of the date of grant, provided that if Employee's employment is
terminated for any reason, other than death or disability (as defined by
Section 7(b) below), prior to the end of the first year period, such option
shall not be exercisable.
(iii) Notwithstanding Sections 6(b)(i) and (ii) above, in the event
of Employee's death or disability (as defined by section 7(b) below),
Employee, his personal representative or guardian shall be entitled to
exercise all vested unexercised options described in sections 6(b)(i) and
(ii) above thirty (30) days after such death or disability.
(iv) Notwithstanding sections 6(b)(i) and (ii) above, the
options granted to Employee shall be accelerated under the same
circumstances set forth in Section 10.4 of Employer's 1997 Stock Option
Plan.
(c) Employer shall provide employee with a leased automobile as agreed
upon by executive compensation committee for the duration of Employee's
employment.
7. Termination. This Agreement may only be terminated upon the occurrence of
one or more of the following events:
(a) Death. This Agreement shall terminate upon the death of the Employee.
(b) Disability. This Agreement shall terminate thirty (30) days after
Employer delivers written notice to the Employee (or his personal
representative) that the Employee is suffering from a disability that renders
him unable to perform the essential functions of his employment hereunder with
or without reasonable accommodations.
(c) Without Cause. This Agreement may be terminated without cause by
either party hereto by delivering to the other party a Notice of Intent to
Terminate at least thirty (30) days prior to such termination (hereinafter
"Notice Period"). Failure by the Employee to provide at least thirty (30) days'
prior written notice of his
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intent to terminate shall result in forfeiture by the Employee of any and all
accrued and unpaid benefits which would otherwise be payable upon termination of
this Agreement. Upon providing notice to the Employee, Employer shall have the
option of relieving the Employee of all duties throughout the Notice Period
through the date of termination, which shall not affect Employee's right to any
pay or benefits through the Notice Period.
(d) For Cause. This Agreement may be terminated by Employer
immediately for cause. For purposes of this Agreement, termination "for cause"
shall include, but not be limited to: (1) any of the following acts that are not
cured within thirty (30) days following the delivery by the Board of Directors
or designee of written notice to Employee which explains the steps needed to
cure: (i) any material breach of this Agreement by the Employee, (ii) failure or
refusal of the Employee to perform satisfactorily his stated duties hereunder,
(iii) any act or omission by Employee that substantially impairs the Company's
business, goodwill, or reputation, or (iv) reasonably-based lack of confidence
by the Board of Directors in Employee's ability to perform the duties of his job
in a satisfactory manner; (2) refusal or repeated failure of the Employee to
carry out the directions of the Board of Directors or designee; (3) any act of
personal dishonesty, breach of fiduciary duty, incompetence, insubordination or
willful misconduct by the Employee; or (4) Employee's violation of any criminal
law, rule or regulation (other than minor traffic violations or similar
offenses).
8. Effect of Termination.
(a) In the event of termination of this Agreement for any reason
permitted hereunder, Employer shall have no further obligation to pay, and
Employee shall have no further right to receive, compensation or benefits
hereunder, except for: (i) payment of any portion of Employee's Base Salary and
benefits attributable to services already performed by the Employee as of the
effective date of such termination; and (ii) compensation and benefits pursuant
to clause (b) of this Section 8.
(b) If Employer terminates Employee pursuant to Section (c) of
Paragraph 7 herein, Employee shall receive separation pay equaling Employee's
base salary for twelve (12) months, minus lawful withholdings and deductions, to
be paid in equal payments over the twelve (12) months following termination
according to Employer's normal payroll practices and schedules, and medical and
dental benefits that Employer offers to other executive employees for Employee
and his family for those same twelve (12) months; provided however that
Employee's receipt of such separation pay shall be contingent on Employee's
binding execution of a Separation Agreement which shall include a full and final
release of any and all claims or controversies ("Claims") Employee (and/or
Employee's heirs, assigns, spouse, marital community, representatives or anyone
on Employee's behalf) has or may have against the Employer (including claims
against Associated Persons as defined in paragraph 11 herein) arising out of or
in any way related to Employee's employment with Employer, the provision of
services by Employee for Employer or Employee's termination of employment with
Employer, as of the effective date of the Separation Agreement and Employee's
continued compliance with his Confidentiality and Non-Competition Agreement as
set forth in paragraph 10 and Exhibit 1 herein.
9. Protection of Employer Property. All records, files, manual, lists of
clients, blanks, forms, materials, supplies, computer programs, and other
materials furnished to the Employee by the Employer, used on its behalf, or
generated or obtained during the course of the Employee's employment hereunder
remain the property of Employer. The Employee is only a holder of this property
for the sole use and benefit of the Employer and will take all reasonable
precautions to safely keep and preserve such property, except as consumed in the
normal business operation of the Employer. Upon termination of the Employee's
employment hereunder, and at any other time upon Employer's request, the
Employee will immediately deliver to Employer, or its authorized representative,
all of Employer's property, including all copies thereof, then in the Employee's
possession or control. Employee authorizes Employer to deduct from Employee's
compensation the value of any Employer property not returned upon Employer's
request.
10. Confidential Information and Non-Competition. Concurrently with the
execution of this Agreement, Employee shall execute an Employee Confidentiality
and Non-Competition Agreement (hereinafter "Confidentiality and Non-Competition
Agreement"), attached hereto as Exhibit 1, and incorporated herein by reference.
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11. Arbitration of Claims.
(a) To the extent provided by law, Employer and Employee mutually consent
to the resolution by arbitration of all Claims, arising out of or related to
Employee's employment (or termination), the Employer may have against Employee
or that Employee may have against Employer (including any parent, subsidiary, or
otherwise affiliated corporation, partnership or other business enterprise and
all of its or their officers, directors, assigns, predecessors, subsidiaries,
affiliates, employers, employees representatives and agents, herein collectively
called "Associated Persons"), including, but not limited to, Claims for wages or
other compensation due; Claims for breach of any contract or covenant (express
or implied); tort Claims; Claims for discrimination (including, but not limited
to, race, sex, religion, national origin, age, marital status, sexual
orientation, medical condition, handicap, disability or any other category
protected by law as all these terms are defined under federal, state, and local
law, but excluding an administrative charge of discrimination); Claims for
benefits (except where an employee benefit or pension plan specifies that its
claims procedure shall culminate in an arbitration procedure different from this
one); Claims for permanent injunctive and/or equitable relief; and/or Claims for
violation of any federal, state, or governmental law, statute, regulation, or
ordinance, except for Claims excluded in this section.
The aggrieved party must give notice of any Claim to the other party which
shall identify and describe the nature of all Claims asserted and the facts upon
which such Claims are based. The notice shall be sent to the other party by
certified or registered mail, return receipt requested.
Claims that Employee may have for workers' compensation or unemployment
compensation benefits are not covered by this arbitration provision. Also not
covered by this arbitration provision are claims by the Employer for damages,
injunctive and any other relief for the following: unfair competition, the use
and/or unauthorized disclosure of trade secrets or confidential information,
violation of Sections 9 or 10 of this Agreement, or violation of the
Confidentiality and Non-Competition Agreement (Exhibit 1 hereto), as to which
Employer may seek and obtain temporary and permanent relief from a court of
competent jurisdiction.
(b) Discovery and Arbitration Procedures.
The Employer and Employee agree that any arbitration shall be in accordance
with the then-current applicable Arbitration Procedures of the American
Arbitration Association ("AAA"). Any claim brought under this section shall be
instituted and commenced exclusively in King County, Washington.
The Arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the State of Washington or federal law of the United States of
America, or both, as applicable to the Claim(s) asserted. The Arbitrator, and
not any federal, state, or local court or agency, shall have exclusive authority
to resolve any dispute relating to the interpretation, applicability,
enforceability or information of this Agreement, including but not limited to
any Claim that all or any of this Agreement is void or voidable. The arbitration
shall be final and binding upon the parties, except as provided in this
Agreement.
Either party may bring an action in any court of competent jurisdiction to
compel arbitration under this Agreement and to enforce an arbitration award.
Except as otherwise provided in this Agreement, the Employer and Employee agree
that neither shall initiate or prosecute any lawsuit or administrative action
(other than an administrative charge of discrimination) in any way related to
any claim covered by this Agreement.
(c) Arbitrator Fees and Costs.
The Employer and Employee shall equally share the fees and cost of the
Arbitrator unless the Arbitrator determines that a different division is
necessary in order to enforce the provisions of this Section 11.
12. Assignability. The contractual obligations of the Employee hereunder are
personal and neither the rights nor obligations under this Agreement may be
assigned or transferred by the Employee to any other person. This Agreement will
bind and benefit any successor of the Employer, whether by merger, sale of
assets, reorganization or other form of business acquisition, disposition or
business reorganization.
13. Entire Agreement. This Agreement, including the Confidentiality and
Non-Competition Agreement (Exhibit 1 hereto), contains the entire Agreement of
the parties hereto. This Agreement shall terminate and supersede any prior
written or oral agreements or understandings between the parties hereto
regarding the terms and conditions of Employer's employment of the Employee.
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14. Modification. No waiver, amendment or modification of this Agreement or any
portion thereof, including any future representations that are inconsistent with
the terms set forth herein, will be valid unless made in writing and duly
executed by each party hereto.
15. Severability. If any one or more of the provisions contained in this
Agreement shall be held to be invalid, illegal, or unenforceable in any respect
under the law applicable hereto, the validity, legality and enforceability of
all remaining provisions shall not in any way be affected or impaired and all
provisions shall be enforceable to the full extent permitted under applicable
law.
16. Waiver. Failure to insist upon strict compliance with any term or condition
of this Agreement shall not constitute a waiver of such term or condition, nor
shall any waiver or relinquishment of any right or power under this Agreement at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time.
17. Effectiveness. This Agreement shall become effective as of the date first
above written upon the execution and delivery of this Agreement (or a
counterpart hereof) by each of the parties hereto.
18. Headings. The Section headings in this Agreement are for convenience of
reference only and shall not be given any effect in the construction or
interpretation hereof.
19. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
20. Choice of Law/Venue. Due to the location of Employer's corporate
headquarters in Washington State, the important role played by such corporate
office in determining the terms and conditions of Employee's employment, and the
need of both parties for predictability in their employment relationship, this
Agreement and all actions or suits hereunder shall be governed by and construed
in accordance with the laws of the State of Washington. Both parties agree that
venue for any suit or action arising from or relating to this Agreement shall be
exclusively King County, Washington. Both parties waive the right to change such
venue and hereby consent to the jurisdiction of such courts for such claims.
21. Attorney Fees. The prevailing party in any suit or action to enforce this
Agreement, or any term hereof, shall be entitled to recover all its costs and
expenses incurred in connection with such suit or action, including without
limitation reasonable attorney's fees incurred at all levels and proceedings.
22. Survival. Notwithstanding any term or provision in this Agreement to the
contrary, the obligations of the Employee pursuant to Sections 9 and 10 of this
Agreement, including the obligations set forth within the Employee
Confidentiality and Non-Competition Agreement (Exhibit 1 hereto), shall survive
the termination of the Employee's employment.
23. Acknowledgment. The Employee acknowledges that he has read this Agreement,
that he has had an opportunity to consult with an attorney regarding the terms
and conditions hereof, that he fully understands the meaning and significance of
such conditions, and that he accepts and signs this Agreement as his own free
act and in full and complete understanding of its present and future legal
effect.
IN WITNESS WHEREOF, each of the parties has duly executed this Agreement
voluntarily and free of duress or any other encumbrance, as of the date above
written.
/S/ XXXXX X. XXXXX
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XXXXX X. XXXXX
DATA DIMENSIONS, INC.
By:
------------------------
Its:
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EMPLOYEE CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT
In consideration of his employment by Data Dimensions, Inc. (hereinafter
"DDI" or "Employer"), and the compensation paid, or to be paid, to him by DDI,
as well as the agreements contained in the Employment Agreement of even date
(and into which this Employee Confidentiality and Non-Competition Agreement
(hereinafter "Confidentiality and Non-Competition Agreement") is incorporated by
reference), Xxxxx X. Xxxxx ("Employee") agrees as follows:
1. Need for and Scope of Employer Protections.
(a) Employee recognizes and acknowledges that:
i. As a result of his employment with Employer, Employee will gain
access to certain Confidential Information (as defined herein), and in many
instances, valuable training, that Employee would not have gained but for his
employment with Employer.
ii. The Confidential Information Employee receives is Employer's
"stock in trade." This information has unique and substantial value to Employer
due to the fact that it is not readily ascertainable to those who are not
employed with Employer, and the unauthorized use or disclosure of this
information will cause Employer to suffer serious and irreparable harm, economic
and otherwise.
iii. Employer is a multi-national concern that does business all over
the United States as well as in foreign countries, the confidential nature of
any Confidential Information divulged to Employee is of value to Employer in all
of the countries, states, counties, and cities in which Employer does business,
and the unauthorized use or disclosure of Confidential Information in any of the
countries, states, counties, or cities in which Employer does business will
cause Employer to suffer serious and irreparable harm, economic and otherwise.
iv. Employer has a vital and substantial interest in maintaining the
confidentiality of its Confidential Information, in maintaining a stable work
force, in continuing its relationships with its Corporate Contacts (as defined
in Paragraph 2 herein), in remaining in business, and in avoiding or minimizing
any disruption of, damage or impairment to, or interference with its business.
(b) Scope of Employer Protection
i. In his employment with Employer, Employee may perform services in
more than one city, county, state or country, and may gain access to
Confidential Information that pertains not only to the specific area in which
Employee lives and/or works but also to other cities, counties, states and
countries in which Employer does business. The employer protections stated
herein are intended to protect Employer to the fullest extent of the law in all
of the cities, counties, states, and countries in which Employer does business.
ii. Employer and Employee expressly acknowledge and agree that each
of the employer protections stated herein is intended to be as broad as may be
permitted under the provisions of applicable law. Employer and Employee further
agree that the unenforceability of any one or more Employer protections stated
herein (or any portion thereof), shall not affect the enforceability of any
other protection (or portion thereof) stated herein.
2. Confidential Information
(a) Definition. As used in this Agreement, the term "Confidential
Information" shall mean any information of DDI, (including any parent,
subsidiary, predecessor, successor, or otherwise affiliated corporation,
partnership or other business enterprise, hereinafter collectively referred to
as the "Corporation"), whether or not in written form, which has not been
previously disclosed to the public by the Corporation and which is either marked
or designated by the Corporation as confidential or proprietary or is or should
have been known to Employee as being treated by the Corporation as confidential
or proprietary or which has been provided to the Company by third parties
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which the Company is obligated to keep confidential. The term "Confidential
Information" shall include, but is not limited to, the following:
i. The Corporation's trade secrets;
ii. The Corporation's methods of conducting or obtaining business,
including methods of marketing and client site acquisition and development;
iii. The Corporation's business plans, operating plans, finances,
properties, legal affairs, labor reports, reports of any nature, financial
history or financial projections;
iv. The identity of any potential locations for new operations;
v. Operating manuals, management guides, marketing plans, or
advertising plans;
vi. Actual or prospective clients, customers, suppliers, vendors,
distributors, investors, or any other persons related to or associated with the
Corporation's operations (hereinafter, "Corporate Contacts");
vii. Information concerning negotiations, proposals, discussions or
agreements with any Corporate Contacts;
viii. Information concerning employee compensation, including
Employee's own salary; or
ix. Any other information or confidences relating to the Corporation
and its business or prospects.
(b) Employee Access to Confidential Information. Employee acknowledges
that in the course of performing his duties for Employer, he will have access to
Confidential Information, the ownership and confidential status of which are
highly important to the Corporation. Employee also acknowledges that such
Confidential Information is and shall continue to be the exclusive and permanent
property of the Corporation, whether or not prepared in whole or in part by
Employee, and whether or not disclosed or entrusted to Employee in connection
with his duties for Employer. Confidential Information shall not be deemed
disclosed to the public due to its being disclosed to Employee or to any past,
present, or potential employees of the Corporation.
(c) Safeguarding of Confidential Information. Employee shall exercise
the highest degree of care in safeguarding Confidential Information against
loss, theft, or other inadvertent disclosure, and shall to take all steps
necessary to maintain the confidentiality thereof.
(d) Nondisclosure of Confidential Information. Employee shall hold all
Confidential Information in a fiduciary capacity and shall not, directly or
indirectly, either during the term of his employment (except as required in the
normal course of the performance of his duties), or at any time after his
employment is terminated for any reason:
i. Disclose or furnish to any person, corporation or other entity,
or use in his own or in any other person's business, any Confidential
Information (except that Employee may disclose his salary on tax returns, credit
applications, and in other manners consistent with personal and financial needs
that do not conflict or compete with Employer); or
ii. Utilize any such Confidential Information, or Employee's
affiliation with Employer, for the gain, advantage, or profit of anyone other
than Employer; or
iii. Take advantage of any business opportunity which, because of
Confidential Information obtained in Employee's employment capacity or as a
result of his employment, Employee knows the Corporation may or is likely to
consider.
(e) Return of Confidential Information. Upon termination of his
employment for any reason, and regardless of whether initiated by DDI or
Employee, or upon the Corporation's request, Employee shall surrender all
papers, records, memoranda, notes, or other documents of any kind, all video and
audio tapes, all computer software in any form, all computer tapes, disks and
other magnetic media, and all copies of any of the above, whether prepared by
himself or by others, relating, directly or indirectly, in any way to the
Corporation, or the business or affairs thereof which have at any time come into
his possession or control, together with his written certification of
compliance. Employee agrees, except for DDI's use, not to make or cause to be
made any copies, duplicates,
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facsimiles or other reproductions, or abstracts or summaries, of any such
materials or objects, or remove any such materials or objects from the
Employer's possession.
(f) Disclosure of Potential Risks. In order to allow the Corporation
to be apprised of and evaluate all risks of disclosure and to take steps, if
necessary, to protect its exclusive ownership and use of Confidential
Information, Employee shall, during the term of his employment with Employer and
for a period of three (3) years thereafter, notify Employer of any employment,
business, or other activity in which Employee plans to engage, whether for
profit or otherwise, that is or may be related in any way to the subject matter
of the Confidential Information or which does or may compete in any manner with
the Corporation. Employee agrees to provide such notification prior to engaging
in any such activity, whether as an employee or independent contractor, whether
paid or unpaid, and prior to commencing any such employment, business, or other
activity.
(g) Disclosure of Prior Restrictions. Employee understands that
Employer is not employing Employee in order to obtain any information which is
the property of any previous employers or any other person or entity for whom
Employee has performed services. Accordingly, Employee warrants and represents
to Employer that: (a) Employee shall not, in performing services for Employer,
make use of information which is the property of and/or confidential to any
previous employer or other person or entity for whom Employee has performed
services; (b) Exhibit A attached hereto is a complete list of all prior
employment, confidentiality and other agreements which may impose restrictions
on his activities, true and correct copies of which have been provided to DDI;
and (c) Employee is not currently subject to any restriction which would prevent
or limit Employee from carrying out his duties for Employer.
3. Noncompetition
a. During the term of Employee's employment, and for six (6) months
after termination of employment (or, in the event Employee is terminated
pursuant to Section (d) of Paragraph 7 of the Employment Agreement then for nine
(9) months after termination of employment), Employee shall not, directly or
indirectly, own, operate, provide financial, technical or other assistance or
services to, accept any employment with, or be connected with, as an officer,
partner, proprietor, consultant, representative, agent or stockholder (other
than as an owner of less than 5% of the stock of a publicly-held corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market), any organization which otherwise directly competes or
may directly compete in the reasonably foreseeable future in any manner with the
Corporation.
b. This covenant not to compete shall apply only within a fifty (50) mile
radius of Bellevue, WA.
c. During the term of his employment and the term of this covenant not to
compete, Employee shall inform any potential employer, prior to accepting
employment, of the existence of this covenant not to compete and provide such
potential employer with a copy thereof.
4. Nonsolicitation of Employees. During the term of Employee's employment and
for twelve (12) months after termination of the Employment Agreement by either
party, Employee shall not induce or attempt to induce any person who is in the
employment of the Employer to leave such employment or engage in any activity
described in Section 3.a. above, nor shall Employee for purposes of violating
the prohibitions in this agreement disclose the names of any of Employer's
employees, either directly or indirectly, to any person or entity.
5. Nonsolicitation of Corporate Contacts.
a. During the term of Employee's employment and for twelve (12) months
after termination of his employment, Employee shall not, for purposes of
providing products or services that are competitive with Employer (as defined in
Section 3.a. above), solicit or accept, or attempt to solicit or accept,
directly or by assisting others, any work, services, goods, or other business
from any of Corporate Contacts of Employer, nor for said purposes shall Employee
disclose the names of any Corporate Contacts, either directly or indirectly, to
any person or entity, unless Employee receives the prior, express, written
consent of Employer.
b. If for any reason Employee shall provide or accept work, services,
goods, or other business to or from any Corporate Contacts that are competitive
with Employer within twelve (12) months after termination of his employment,
then at the sole election of Employer, Employee shall pay to Employer fifty
percent (50%) of the actual fees billed or billable to such Corporate Contacts
during that period of time. This remedy, if elected by Employer, shall be in
addition to any other remedies provided to Employer under this Agreement or by
law.
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6. Disclosure and Assignment to Employer
Employee will disclose immediately and assign to Employer, or to any other
person designated in writing by Employer, all inventions, discoveries and
improvements, patentable or unpatentable, made, conceived, or first reduced to
practice by Employee, alone or jointly with others, during his employment, which
inventions or improvements:
a. Were made, conceived or first reduced to practice in the performance
of duties assigned to or undertaken by the Employee as a part of such
employment, or
b. Were made, conceived or first reduced to practice with the material
use of the Employer's time, equipment, material, facilities, funds, or
c. Make material use of any trade secrets or other confidential
information of the Employer's with which Employee comes into contact, or
d. Relate to any investigations or obligations undertaken by the
Employer, the details of which the Employee became aware of because of this
employment, or
e. Which relate to investigations or obligations undertaken by the
Employer and which are being performed at the physical location of employment,
and to which the Employee has access.
All such inventions, discoveries and improvements will be the sole and exclusive
property of Employer.
This Agreement does not apply to any invention that Employee had developed
entirely on his own time without using the employer's equipment, supplies,
facilities, or trade secret information, except for those inventions that either
(a) relate at the time of conception or reduction to practice of the invention
to the employer's business, or actual or demonstrably anticipated research or
development of the employer, or (b) result from any work performed by the
employee for the employer.
7. Perfection of Rights, Title and Interest, and Obtaining of Patent. Employee
will, during his employment for Employer and thereafter, perform at the request
and expense of Employer all lawful acts and execute, acknowledge and deliver all
instruments deemed necessary or desirable by Employer to vest in Employer the
entire right, title and interest in the inventions, discoveries and improvements
referenced above, and to enable Employer to properly prepare, file and prosecute
applications for and obtain and defend patents of the United States and of
foreign countries, as well as reissues, renewals and extensions thereof, and to
obtain and record title to such applications and patents, so that Employer shall
be the sole and absolute owner thereof in any and all countries in which it may
desire patent or like protection.
8. Work Made for Hire. To the extent not otherwise covered by the provisions
above, Employee agrees that all creative work, including without limitation
designs, drawings, specifications, techniques, models, and processes, prepared
or originated by Employee during or within the scope of employment, whether or
not subject to protection under federal copyright or other law, constitutes work
made for hire, all rights to which are owned by DDI, Inc.; and, in any event,
employee assigns to DDI, Inc. all rights, title and interest, whether by way of
copyright, trade secret, or otherwise, in all such work, whether or not subject
to protection by copyright or other law.
9. Miscellaneous
(a) Scope. The scope and effect of the covenants contained in this
Confidentiality and Non-Competition Agreement shall be as broad as may be
permitted under the provisions of applicable law. To the extent that the
language of such covenants may be greater than permitted by applicable law, that
portion thereof shall be ineffective, but the provisions of the covenants shall
nevertheless remain effective with respect to such portion of the covenants as
shall be permitted by applicable law.
(b) Choice of Law/Venue. Due to the location of DDI's corporate
headquarters in Washington State, the important role played by such corporate
office in determining the terms and conditions of Employee's employment, and the
need of both parties for predictability in their employment relationship, this
Confidentiality and Non-Competition Agreement and all actions or suits hereunder
shall be governed by and construed in accordance with the laws of the State of
Washington. Both parties agree that suit or action relating to this
Confidentiality and Non-Competition Agreement shall not be subject to the
Arbitration provision of Section 11 of the Employment Agreement
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and shall be instituted and commenced exclusively in the King County Superior
Court for the State of Washington, or the United States District court for the
Western District of Washington. Both parties waive the right to change such
venue and hereby consent to the jurisdiction of such courts for such claims.
(c) Entire Agreement. This Confidentiality and Non-Competition Agreement
and the Employment Agreement between Employee and DDI dated as of this same date
contain the entire agreement of the parties hereto. These two Agreements shall
terminate and supersede any prior written or oral agreements or understandings
between the parties hereto regarding the terms and conditions of Employer's
employment of the Employee.
(d) Modification. No waiver, amendment or modification of this
Confidentiality and Non-Competition Agreement or any portion thereof, including
any future representations that are inconsistent with the terms set forth
herein, will be valid unless made in writing and duly executed by each party
hereto.
(e) Attorney Fees. The prevailing party in any suit or action to enforce
this Confidentiality and Non-Competition Agreement, or any term hereof, shall be
entitled to recover all its costs and expenses incurred in connection with such
suit or action, including without limitation reasonable attorney's fees incurred
at all levels and proceedings.
(f) Assignment. Employee agrees that this Confidentiality and
Non-Competition Agreement may be assigned by DDI in connection with a sale of
DDI's business or other change in the control of DDI. Employee agrees that if
Employee is transferred to a subsidiary or affiliate of DDI or the Corporation,
or from one subsidiary or affiliate to another, all the terms and conditions of
this Agreement shall apply between such subsidiary or affiliate and himself with
the same force and effect as if the Agreement had been made with such subsidiary
or affiliate in the first instance.
(g) Acknowledgment of Irreparable Harm; Remedies. Employee acknowledges
that the Confidential Information that Employee will obtain as a result of his
employment hereunder is special and unique to DDI, and that a breach by Employee
of any of the terms and covenants of this Agreement will result in irreparable
and continuing harm to DDI for which there will be no adequate remedy at law.
i. In the event of a breach or threatened breach of any of the terms
or covenants contained in this Confidentiality and Non-Competition Agreement,
Employee agrees that DDI shall be entitled to temporary and permanent injunctive
relief upon a showing of said breach or threatened breach without proof of
actual damage therefore against the Employee and any of the Employee's partners,
agents, employers and employees, or any persons acting for or with the Employee,
and/or an order of temporary and permanent specific performance enforcing this
Agreement, and any other remedies provided to DDI by applicable law.
ii. In the event any of the terms or conditions of this Agreement are
found unreasonable by a court of competent jurisdiction, Employee agrees to
accept as binding in lieu thereof, any such lesser restrictions which said court
or arbitrator may deem reasonable.
(i) Effectiveness. This Confidentiality and Non-Competition Agreement
shall become effective as of the date first below written upon the execution and
delivery of this Agreement (or a counterpart hereof) by each of the parties
hereto.
(j) Headings. The Section headings in this Confidentiality and
Non-Competition Agreement are for convenience of reference only and shall not be
given any effect in the construction or interpretation hereof.
(k) Counterparts. This Confidentiality and Non-Competition Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.
(l) Duration. The obligations set forth in this Confidentiality and
Non-Competition Agreement will continue as set forth herein beyond the term of
Employee's employment by DDI, regardless of the reason, or lack thereof, for the
termination of his employment or whether any compensation was received by his in
connection therewith.
(m) Subpoenas. If Employee is served with any subpoena or other compulsory
judicial or administrative process calling for production of Confidential
Information, Employee will immediately notify DDI in order that the Corporation
may take such action as it deems necessary to protect its interests.
11
(n) Waiver. Failure to insist upon strict compliance with any term or
condition of this Agreement shall not constitute a waiver of such term or
condition, nor shall any waiver or relinquishment of any right or power under
this Agreement at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time.
(o) Acknowledgment. Employee acknowledges that he has read this
Confidentiality and Non-Competition Agreement, that he has had the opportunity
to consult with counsel regarding its contents, that he fully understands the
meaning and significance of the provisions set forth herein and that he accepts
and signs this Confidentiality and Non-Competition Agreement as his own free act
and in full and complete understanding of its present and future legal effect.
IN WITNESS WHEREOF, each of the parties has duly executed this Agreement
voluntarily and free of duress or any other encumbrance, as of ______________,
1998.
/S/ XXXXX X. XXXXX
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XXXXX X. XXXXX
DDI CORPORATION
By:
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Its:
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EXHIBIT A TO CONFIDENTIALITY AGREEMENT
List all employment, confidentiality or other agreements to which you are a
party and which may restrict your activities on behalf of DDI.
