CONFIDENTIALITY AND NON-COMPETITION AGREEMENTConfidentiality Agreement |
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Exhibit 10.3.2
CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT
This
Confidentiality and Non-Competition Agreement (the Agreement) is made as of
this 6th day of August, 2008 (the Effective Date), by and between HEALTH
GRADES, INC. (the Company) and KERRY R. HICKS (Employee).
RECITALS
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The Company is a Delaware corporation with its principal place
of business at 500 Golden Ridge Road, Suite 100, Golden, Colorado 80401.
In the course of its business, the Company has developed significant
confidential and proprietary information and trade secrets from which it
derives independent economic advantage as a result of that information and
those trade secrets being not generally known. |
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Employee is a founder of the Company and has served as the
Companys Chief Executive Officer and a director since the Companys
inception in 1995. Employee currently is Chief Executive Officer, President
and Chairman of the Board of the Company. The Company and Employee previously
entered into a Noncompetition and Nonsolicitation Agreement effective as of
effective as of March 17, 2000, and amended and restated effective
December 31, 2007 (the Prior Noncompete Agreement). The Company and
Employee also previously entered into an Employment Agreement effective as of
April 1, 1996, and amended and restated effective December 31, 2007
(the Prior Employment Agreement). |
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The Company and Employee desire to amend, restate and replace
the Prior Noncompete Agreement with a new agreement that, among other things,
(i) more clearly defines the business of the Company, (ii) extends
Employees noncompetition period to a period that the Company and Employee
agree is commensurate with, among other things, Employees positions with the
Company and his special experience with and knowledge of the Companys
business, and (iii) provides Employee with compensation for his
noncompetition and other agreements that the Company and Employee believe is
reasonable and appropriate under the circumstances. Contemporaneous with this
Agreement, the Company and Employee are entering into an Amended and Restated
Employment Agreement that amends, restates and replaces the Prior Employment
Agreement (the New Employment Agreement). |
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Employee acknowledges that Employees position is an executive
or management level position. Due to Employees special training, experience,
and knowledge that Employee has regarding the Companys business as a result
of Employees employment with the Company, Employee acknowledges that this
Agreement is intended to protect the Company from competition by Employee for
the period of time and in the location(s) stated in Section 4 below. |
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Employee recognizes and acknowledges that the Company has
developed significant confidential and proprietary information and trade
secrets from which it derives independent economic advantage as a result of
that information and those trade secrets being not generally known. Employee
further recognizes and acknowledges that Employees position with the Company
is one of trust and confidence by reason of Employees access to, development
of, or contact with the Companys confidential information and proprietary
information and trade secrets. |
NOW,
THEREFORE, in consideration of these premises, the mutual promises and
covenants contained herein, the consideration recited above, the compensation
and benefits to be paid by the Company, the services to be rendered by
Employee, and intending to be legally and equitably bound hereby, the parties
hereto agree as follows:
1. Confidentiality.
(a) Employee shall,
during and after Employees term of employment with the Company: (i) keep
confidential all Confidential Information (as defined in Section 1(b) below) at
any time known to Employee concerning the Company or the Business, as defined
in Section 4, (ii) not disclose or use any Confidential Information
for non-business reasons or for Employees benefit, (iii) not disclose any
Confidential Information to third parties without the Companys prior written
permission, (iv) exercise reasonable care to prevent dissemination of
Confidential Information to third persons, (v) not make copies of documents,
including, without limitation, biographies, archives, drawings, notebooks,
reports, and video and audio recordings, computer records or files (in whatever
medium they exist), which embody any Confidential Information, unless necessary
for the performance of Employees duties as assigned by the Company,
(vi) return to the Company any documents, including without limitation,
archives, drawings, notebooks, reports, video or audio recordings, that contain
Confidential Information and are in Employees possession whenever Employee may
leave the Companys employment, and (vii) not disclose or use Confidential
Information in any way that might injure or jeopardize the operations of the
Company or any of its clients.
(b) Confidential
Information shall include any information regarding the operations of the
Company or any of its clients or customers, which information is of a special,
unique, or nonpublic nature, including, but not limited to any information
relating to the business or affairs of the Company and/or the Business, as
defined in Section 4. Such information shall include, but is not limited
to, information relating to financial statements, client or customer
identities, potential clients or customers, employees, suppliers, servicing
methods, equipment, programs, strategies and information, analyses, profit
margins, marketing plans, operating policies and procedures, pricing
information, and other business and financial information, client or customer
lists, and contracts or other proprietary information used by the Company in
connection with the Business; provided, however, that Confidential Information
shall not include any information that is in the public domain or becomes known
in the industry through no wrongful act on the part of Employee.
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Proprietary Property. Employee discloses and assigns to Company Employees interest
in any and all copyrightable works, client information, inventions, designs,
trade secrets, processes, discoveries, concepts, or improvements (hereinafter
collectively called Developments), including all rights to obtain,
register, perfect or enforce the Companys proprietary interest in such
Developments, that Employee has to date, or may in the future, discover,
conceive, and/or develop, either individually or jointly with others during the
course of Employees employment with the Company (including any and all
Developments based wholly or in part upon ideas conceived during Employees
employment with the Company), or while using the Companys data, facilities
and/or materials, provided the subject matter is one within the Companys
field of interest. Subject matter within the Companys field of interest
includes any subject which the Company considers relevant to any past,
current, or future projects or operations. Employees obligations under this
Section apply without regard to whether any idea for a Development occurs to
Employee on or off the job. Employee further agrees that all Developments as
described herein are the Companys proprietary property in which the Company
has the exclusive legal right, whether or not patent applications are filed
thereon. |
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Ownership of Ideas and Documents. All ideas, inventions, and other
Developments or improvements conceived or reduced to practice by Employee,
alone or with others, whether or not during working hours, that are within
the scope of the Companys business operations or that relate to any of the
Companys work or projects, shall be the exclusive property of the Company.
Employee agrees to assist the Company, at its expense, to obtain copyrights
or trademarks on any such copyrightable or trademarkable developments, and
agrees to execute all documents necessary to obtain such copyrights or
trademarks in the name of the Company. Employee shall assist the Company in
the preparation of patents, including the execution and delivery of any
disclosures, patent applications or papers related to any development within
the Companys field of interest as described in Section 2 above. If such
assistance takes place when Employee is no longer employed with the Company,
the Company will compensate Employee at a reasonable rate for Employees
assistance. |
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Covenant Not to Compete. The Company has spent a significant amount of time, effort, and
money developing the information, products, services, methods, systems,
techniques, procedures, know-how and client and customer information used by
the Company and the processes for identifying and marketing to the Companys
clients and customers and potential clients and customers and handling the
needs of the Companys clients and customers. This unique compilation of
information has resulted in unique products and forms, management and control
systems, and generally a style, system, technique and method of business
operation that gives the Company an advantage over competitors that do not
know of or utilize such information. As a result, such information is
proprietary to the Company, confidential, and constitutes trade secrets.
Accordingly: |
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(a) |
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Employees Acknowledgment. Employee agrees and acknowledges that in order to assure the
Company that it will retain its value as a going concern, it is necessary
that Employee undertake not to use Employees special knowledge of the
Company and Employees relationships with customers and suppliers and other
parties to compete with the Company. Employee further acknowledges that: |
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(1) |
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Employee occupies an executive and management position within
the Company; |
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(2) |
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During Employees employment under this Agreement, Employee will
occupy a position of trust and confidence with the Company and Employee has,
and/or will, become familiar with the Companys trade secrets and with other
proprietary and confidential information concerning the Company; |
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