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”).
|
1.
|
|
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.
|
|
2.
|
|
Employee is a founder of the
Company and has served as the Company’s Chief Executive
Officer and a director since the Company’s 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”).
|
|
3.
|
|
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
Employee’s noncompetition period to a period that the Company
and Employee agree is commensurate with, among other things,
Employee’s positions with the Company and his special
experience with and knowledge of the Company’s 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”).
|
|
4.
|
|
Employee acknowledges that
Employee’s position is an executive or management level
position. Due to Employee’s special training, experience, and
knowledge that Employee has regarding the Company’s business
as a result of Employee’s 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.
|
|
5.
|
|
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 Employee’s
position with the Company is one of trust and confidence by reason
of Employee’s access to, development of, or contact with the
Company’s 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:
(a) Employee shall, during and after
Employee’s 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
Employee’s benefit, (iii) not disclose any Confidential
Information to third parties without the Company’s 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 Employee’s 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 Employee’s possession
whenever Employee may leave the Company’s 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.
2
|
2.
|
|
Proprietary Property
. Employee discloses
and assigns to Company Employee’s 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
Company’s 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 Employee’s employment with the Company
(including any and all Developments based wholly or in part upon
ideas conceived during Employee’s employment with the
Company), or while using the Company’s data, facilities
and/or materials, provided the subject matter is one within the
Company’s field of interest. “Subject matter within the
Company’s field of interest” includes any subject which
the Company considers relevant to any past, current, or future
projects or operations. Employee’s 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 Company’s
proprietary property in which the Company has the exclusive legal
right, whether or not patent applications are filed
thereon.
|
|
3.
|
|
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 Company’s business operations or that relate to any of
the Company’s 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 Company’s 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 Employee’s
assistance.
|
3
|
4.
|
|
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
Company’s clients and customers and potential clients and
customers and
|
|
