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CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

Confidentiality Agreement

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT You are currently viewing:
This Confidentiality Agreement involves

HEALTH GRADES INC

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Title: CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
Date: 8/11/2008
Industry: SVSBUS     Sector: SERVIC

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Filed by Bowne Pure Compliance

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

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:

 

 


 

1. Confidentiality.

(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 handling the needs of the Company’s 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:

 

(a)

 

Employee’s 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 Employee’s special knowledge of the Company and Employee’s relationships with customers and suppliers and other parties to compete with the Company. Employee further acknowledges that:

 

 

(1)

 

Employee occupies an executive and management position within the Company;

 

 

 

 

 

(2)

 

During Employee’s 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 Company’s trade secrets and with other proprietary and confidential information concerning the Company;

 

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