This Employment Agreement (the
“Agreement”) is made and entered into as of April 13,
2007 by and between DDi Corp., a Delaware corporation, on behalf of
itself and any and all of its subsidiaries (together, the
“Company”), and Sally L. Goff
(“Executive”).
A. Prior to the date of this Agreement,
Executive has been serving as the Vice President & Chief
Financial Officer of the Company.
B. The Company desires to employ the Executive
from the date set forth above (the “Effective Date”)
until expiration of the term of this Agreement, and Executive is
willing to be employed by Company during that period, on the terms
and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, the parties
agree as follows:
1. Position and Duties . During the term
of this Agreement, Executive will continue to be employed by the
Company to serve as Vice President & Chief Financial Officer,
reporting to the Company's Chief Executive Officer.
2. Standards of Performance . Executive
will at all times faithfully, industriously and to the best of her
ability, experience and talents perform all of the duties required
of and from her pursuant to the terms of this Agreement. Executive
will devote her full business energies and abilities and all of her
business time to the performance of her duties hereunder and will
not, without the Company's prior written consent, render to others
any service of any kind (whether or not for compensation) that, in
the Company's sole but reasonable judgment, would or might
interfere with the full performance of her duties hereunder.
Notwithstanding the foregoing, Executive is permitted to spend
reasonable amounts of time to manage her personal financial and
legal affairs and, with the Company's consent which will not be
unreasonably withheld, to serve on civic, charitable, industry or
corporate boards or advisory committees, provided that such
activities, individually and collectively, do not materially
interfere with the performance of Executive's duties hereunder. In
no event will Executive engage in any activities that could
reasonably create a conflict of interest or the appearance of a
conflict of interest. Executive shall be subject to the Company's
policies, procedures and approval practices, as generally in effect
from time to time.
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3.
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Salary,
Benefits and Other Compensation .
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(a) Base
Salary . As an annual base salary (“Base Salary”)
for all services
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rendered pursuant to this
Agreement, Executive will be paid an initial Base Salary in the
gross amount of Two Hundred Fifty Thousand Dollars ($250,000)
calculated on an annualized basis effective April 1, 2007, less
necessary withholdings and authorized deductions, and payable
pursuant to the Company's regular payroll practices at the time.
The Base Salary is subject to periodic review not less frequently
than annually within the first three months after the end of
the
next
successive fiscal year, and to increase (but not decrease) as
approved by the Compensation Committee of the Board
(“Compensation Committee”), or, if the Board desires to
approve increases to the Base Salary, the Board, in the sole
discretion of the Compensation Committee or the Board, as
applicable.
(b) Incentive Bonuses . During the term
of Executive's employment under this Agreement, Executive will be
eligible to participate in all bonus plans applicable to senior
executives of the Company established by the Board. The target
amount of incentive bonuses will be determined by the Compensation
Committee, and will be tied to the Company's achievement of
financial objectives established by the Board and individual
performance objectives to be established annually by the
Compensation Committee. For the avoidance of doubt, incentive
bonuses will be payable only if financial and performance
objectives established by the Board and the Compensation Committee
are achieved. Executive must be employed by the Company as of the
eligibility date established by the Compensation Committee for a
given fiscal year to be eligible for consideration for an incentive
bonus for that fiscal year. Incentive bonuses will be paid out
according to the terms of the bonus plans that are to be determined
by the Compensation Committee.
(c) Equity Awards . Executive will be
entitled to stock options, grants of restricted stock or other
equity-based compensation commensurate with Executive's position
and level of responsibility, as determined from time-to-time by the
Compensation Committee and/or the Board.
(d) Paid Time Off and Benefits .
Executive will accrue paid time off for vacation at the rate of
four (4) weeks per year. Except for emergencies or other
unanticipated events, the days selected for Executive's vacation
must be mutually agreeable to the Company and to Executive.
Executive will accrue paid time off for illness pursuant to the
Company's regular policies. In addition, Executive is entitled to
participate in any plans regarding benefits of employment,
including pension, profit sharing, group health, disability
insurance and other employee welfare benefit plans now existing or
hereafter established to the extent that Executive is eligible
under the terms of such plans and if the other executive officers
of the Company generally are eligible to participate in such plan.
The Company may, in its sole discretion and from time to time,
establish additional senior management benefit plans as it deems
them appropriate. Executive understands that any such plans may be
modified or eliminated in the Company's sole discretion in
accordance with applicable law.
(e) Reimbursement of Business Expenses .
The Company will promptly reimburse Executive for reasonable,
customary and documented out-of-pocket business expenses in
connection with the performance of Executive’s duties under
this Agreement in accordance with the policies and procedures
established by the Company.
(f) Automobile Allowance . The Company
will pay Executive an automobile allowance in the amount of $750
per month.
(g) Sarbanes-Oxley Act Loan Prohibition
. To the extent that any Company benefit, program, practice,
arrangement or this Agreement would or might otherwise result in
Executive's receipt of an illegal loan (the "Loan"), the Company
shall use commercially
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reasonable
efforts to provide Executive with a substitute for the Loan that is
lawful and of at least equal value to Executive. If this cannot be
done, or if doing so would be significantly more expensive to the
Company than making the Loan, the Company need not make the Loan to
Executive or provide her a substitute for it.
4. Term and Termination of Employment .
Executive will be employed for no specific term and until
terminated pursuant to the terms of this Agreement.
(a) Termination for Cause . The Company
may terminate Executive's employment at any time and without prior
notice, written or otherwise, for Cause. As used in this Agreement,
"Cause" shall mean any of the following conduct by Executive: (i)
material breach of this Agreement, or of a Company policy or of a
law, rule or regulation applicable to the Company or its
operations; (ii) demonstrated and material neglect of duties, or
failure or refusal to perform the material duties of her position
following written notice from the Board and a reasonable
opportunity to cure of not less than sixty (60) days, or the
failure to follow a reasonable and lawful instruction of the Board
following written notice from the Board and an opportunity to cure
of at least twenty (20) days; (iii) dishonesty, self-dealing, fraud
or similar misconduct; or (iv) conviction of, or plea of nolo
contendere to, a felony, a crime of falsehood, or a crime involving
fraud or moral turpitude. In the event of termination for Cause,
Executive will be entitled only to payment of any earned but unpaid
Base Salary and accrued but unused vacation paid to the extent
required by applicable law through the termination date, which for
purposes of this Section 4(a) will be the date on which the notice
is given. The Company will have no further obligation to pay any
compensation of any kind (including without limitation any bonus or
portion of a bonus that otherwise may have become due and payable
to Executive with respect to the year in which such termination
date occurs), or severance payment of any kind nor to make any
payment in lieu of notice.
(b) Termination Due to Disability . If
Executive becomes unable, due to physical or mental illness or
injury, to perform the essential duties of her position for 180
consecutive calendar days or more ("Disability"), the Company has
the right to terminate Executive's employment on 30 days written
notice. A termination of Executive's employment by the Company for
Disability shall be communicated to the Executive by written
notice, and shall be effective on the 30th day after receipt of
such notice by Executive (the "Disability Effective Date"), unless
Executive returns to full-time performance of Executive's duties
that is satisfactory to the Company before the Disability Effective
Date. In the event of termination for Disability, Executive will be
entitled to receive: (i) payment of all earned but unpaid
compensation (including expense reimbursements) through the
effective date of termination, as specified in the notice, (ii) an
amount equal to the pro-rata portion of any bonus payments that
would have been due to the Executive under Section 3(b) of this
Agreement had Executive been employed by the Company as of the last
day of the fiscal year during which such termination occurred,
calculated as the product of the bonus (as determined pursuant to
Section 3(b)) multiplied by a fraction, the numerator equal to the
number days from the start of the applicable fiscal year through
the termination date of Executive's employment with the Company,
and the denominator being 365; and (iii) whatever benefits to which
she may be entitled pursuant to the Company's benefit
plans.
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(c) Termination Due to
Death . Executive's employment pursuant to this Agreement shall
be immediately terminated without notice by the Company upon the
death of the Executive. If Executive should die while actively
employed pursuant to this Agreement, the Company will pay to her
estate or designated beneficiaries within sixty (60) days: (i)
payment of all earned but unpaid compensation (including expense
reimbursements) through the date of Executive's death, (ii) an
amount equal to the pro-rata portion of any bonus payments that
would have been due to the Executive under Section 3(b) of this
Agreement had Executive been employed by the Company as of the last
day of the fiscal year during which such termination occurred,
calculated as the product of the bonus (as determined pursuant to
Section 3(b)) multiplied by a fraction, the numerator equal to the
number days from the start of the applicable fiscal year through
the termination date of Executive's employment with the Company,
and the denominator being 365, and (iii) whatever benefits to which
she or her estate may be entitled pursuant to the Company's benefit
plans.
(d) Termination Other than for Cause .
The Company may terminate Executive's employment without Cause (as
defined in this Agreement) at any time and without prior notice,
written or otherwise. In the event the Company terminates
Executive's employment for other than Cause, Disability or death,
and subject to the other provisions of this Agreement, Executive
will be entitled to:
(i)
continued coverage under the Company's benefit plans through the
termination date in accordance with the terms of the
plans;
(ii)
payment of all earned but unpaid compensation through the effective
date of termination, payable on or before the termination
date;
(iii) reimbursement of any monies advanced or
incurred by Executive in connection with her Employment for
reasonable and necessary Company-related business expenses incurred
on or before the termination date;
(iv)
payment of the equivalent of the Base Salary Executive would have
earned over the next twelve (12) months (the “Severance
Period”) (less necessary withholdings and authorized
deductions) at her then current Base Salary rate ("Severance
Payment");
(v)
an amount equal to the pro-rata portion of any bonus payments that
would have been due to the Executive under Section 3(b) of this
Agreement had Executive been employed by the Company as of the last
day of the fiscal year during which such termination occurred,
calculated as the product of the bonus (as determined pursuant to
Section 3(b)) multiplied by a fraction, the numerator equal to the
number days from the start of the applicable fiscal year through
the termination date of Executive's employment with the Company,
and the denominator being 365;
(vi)
at Executive's option, reimbursement of insurance premiums payable
by Executive to continue Executive's group health coverage pursuant
to COBRA (if Executive timely elects COBRA coverage) during the
Severance Period; and
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(vii) the number of outstanding unvested stock
options and restricted stock previously granted to Executive that
would have vested over the Severance Period if Executive remained
employed by the Company shall vest upon such
termination.
Executive shall not receive the payments and
benefits under subsections (iv)-(vii), above, unless she signs the
severance agreement and general release document in the form
attached as Exhibit A or a similar form. In addition, if
Executive accepts other employment within the Severance Period, the
Company's obligation under (vi) above to reimburse premiums for
COBRA continuation of group health insurance coverage will be
extinguished as of the date of the date the Executive becomes
covered under the group health plan of the Executive's new
employer.
(e) Voluntary Termination for Good
Reason . Executive may terminate this Agreement for Good Reason
(as defined in this Agreement) by giving written notice of such
termination, which termination will become effective on the
fifteenth day following receipt; provided, however, that Executive
shall be obligated to continue her employment with the Company or
its successor for a period of not less than ninety days following a
Change of Control (as defined below), to assist with transition. As
used in this Agreement, “Good Reason” shall mean the
occurrence of one or more of the following: (i) a material
reduction in Executive's compensation or benefits; (ii) involuntary
relocation of primary work location more than 50 miles from the
current location; (iii) public disparagement of the Executive by
the Company’s Board of Directors by press release or other
formally released announcement that is injurious to
Executive’s reputation as an executive (notwithstanding the
foregoing, statements made in the course of sworn testimony in
administrative, judicial or arbitral proceedings, including,
without limitation, depositions in connection with such
proceedings, shall not be subject to this clause (iii)); and/or
(iv) in the event of a Change of Control, the successor to the
Company fails to offer Executive a position having
responsibilities, compensation and benefits substantially similar
to those enjoyed by Executive immediately preceding the Change of
Control or there is any change in the reporting structure so that
the Executive is required to report to any person other than the
chief executive officer of the successor to the Company. In the
event of resignation for Good Reason, Executive will be entitled to
the benefits set forth in subsection 4(d), above, in the event of
termination by the Company without Cause, on the same conditions
that apply to those benefits, specifically including, but not
limited to, the signing of a severance agreement and general
release document, attached as Exhibit A or a similar
form.
(i)
As used in this Agreement, a "Change in Control" shall mean any of
the following events:
(ii)
the acquisition by any person (as such term is defined in Section
13(c) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act")), other than (A) a trustee or other fiduciary
holding securities of the Company under an employee benefit plan of
the Company or (B) an entity in which the Company directly or
indirectly beneficially owns 50% or more of the voting securities
of such entity (an "Affiliate"), of any securities of the Company,
immediately after which such person has beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934 Act)
of more than fifty percent (50%) of (A) the outstanding shares of
Common Stock or
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(B) the combined voting power of
the Company's then outstanding securities entitled to vote
generally in the election of directors;
(iii) the Company is a party to a merger or
consolidation with a person other than an Affiliate which results
in the holders of voting securities of the Company outstanding
immediately before such merger or consolidation failing to continue
to represent (either by remaining outstanding or being converted
into voting securities of the surviving entity) more than 50% of
the combined voting power of the then outstanding voting securities
of the corporation resulting from such merger or consolidation;
or
(iv)
all or substantially all of the assets of the Company are, in any
transaction or series of transactions, sold or otherwise disposed
of (other than to an Affiliate);
provided, however, that in no event shall a
"Change in Control" be deemed to have occurred for purposes of this
Agreement solely because the Company engages in an internal
reorganization, which may include a transfer of assets to, or a
merger or consolidation with, one or more Affiliates.
(f) Bonus Payable on Termination Following a
Change of Control . If within 12 months following a Change of
Control, (i) Executive's employment is terminated without Cause, or
(ii) Executive terminates Executive’s employment for Good
Reason as a result of such Change of Control, then, in lieu of the
pro-rated bonus payable under subsection 4(d)(v), above, Executive
shall be entitled to an amount equal to 100% of the target amount
of incentive bonuses that would have been available to be earned by
the Executive under Section 3(b) of this Agreement for the fiscal
year during which such termination occurred. Such payment will be
in addition to the other severance benefits set forth in subsection
4(d) or 4(e), as applicable, and shall be subject to the conditions
of, and paid in accordance with the payment schedules set forth in,
the applicable subsection.
(g) Voluntary Resignation Without Good
Reason . In the event that the Executive resigns for other than
Good Reason as defined above in subsection 4(e), Executive will be
entitled only to payment of any earned but unpaid compensation
through the termination date and accrued but unused vacation to the
extent required by applicable law. The Company will have no further
obligation to pay any compensation of any kind (including without
limitation any bonus or portion of a bonus that otherwise may have
become due and payable to Executive with respect to the year in
which such termination date occurs), or severance payment of any
kind.
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5.
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Proprietary
Information Obligations .
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(a)
Proprietary Information and Confidentiality . Both before
and during the term
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of Executive's employment,
Executive will have access to and become acquainted with Company
confidential and proprietary information (together "Proprietary
Information"), including but not limited to information or plans
concerning the Company's customer relationships; personnel; sales,
marketing and financial operations and methods; trade secrets,
formulae, devices; secret inventions; processes; and other
compilations of information, records, and specifications. Executive
will not disclose any of the Proprietary Information directly or
indirectly, or use it in any way, either during the term of this
Agreement or at any time thereafter, except as reasonably required
or specifically requested in the course of her employment with the
Company or as authorized in writing by the Company.
Notwithstanding, Proprietary Information does not include
information that is otherwise publicly known or available, provided
it has not become public as a result of a breach of this Agreement
or any other agreement to keep it confidential. It is not a breach
of this Agreement for Executive to disclose Proprietary Information
pursuant to order of a court or other governmental or legal body.
All files, records, documents, computer-recorded or electronic
information, drawings, specifications, equipment, and similar items
relating to Company business, whether prepared by Executive or
otherwise coming into her possession, will remain the Company's
exclusive property and will not be removed from Company premises
under any circumstances whatsoever without the Company's prior
written consent, except when, and only for the period, necessary to
carry out Executive's duties hereunder, and if removed, will be
immediately returned to the Company on termination of employment,
and Executive will keep no copies thereof.
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(b)
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Inventions
Agreement and Assignment .
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(i) Executive
hereby agrees to disclose promptly to the Company
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(or any persons designated by it) all
developments, designs, creations, improvements, original works of
authorship, formulas, processes, know-how, techniques and/or
inventions, hereinafter referred to collectively as "Inventions")
(A) which are made or conceived or reduced to practice by
Executive, either alone or jointly with others, in performing her
duties during the period of Executive's employment by the Company,
that relate to or are useful in the present or future business of
the Company; or (B) which result from tasks assigned to Executive
by the Company, or from Executive's use of the premises or other
resources owned, leased or contracted by the Company.
(ii)
Executive agrees that all such Inventions which the Company in its
discretion determines to be related to or useful in its business or
its research or development, or which result from work performed by
Executive for the Company, will be the sole and exclusive property
of the Company and its assigns, and the Company and its assigns
will have the right to use and/or to apply for patents, copyrights
or other statutory or common law protections for such Inventions in
any and all countries. Executive further agrees to assist the
Company in every reasonable way (but at the Company's expense) to
obtain and from time to time enforce patents, copyrights and other
statutory or common law protections for such Inventions in any and
all countries. To that end, Executive will execute all documents
for use in applying for and obtaining such patents, copyrights and
other statutory or common law protections therefor and
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enforcing
the same, as the Company may desire, together with any assignments
thereof to the Company or to persons or entities designated by the
Company. Should the Company be unable to secure Executive's
signature on any document necessary to apply for, prosecute,
obtain, or enforce any patent, copyright or other right or
protection relating to any Invention, whether due to her mental or
physical incapacity or any other cause, Executive hereby
irrevocably designates and appoints the Company and each of its
duly authorized officers and agents as Executive's agent and
attorney-in-fact, to act for and in her behalf and stead, to
execute and file any such document, and to do all other lawfully
permitted acts to further the prosecution, issuance, and
enforcement of patents, copyrights or other rights or protections
with the same force and effect as if executed and delivered by
Executive. Executive's obligations under this subsection will
continue beyond the termination of Executive's employment with the
Company, but the Company will compensate Executive at a reasonable
rate after such termination for time actually spent by Executive at
the Company's request in providing such assistance.
(iii) Executive hereby acknowledges that all
original works of authorship which are made by Executive (solely or
jointly with others) within the scope of Executive's employment
which are protectable by copyright are "works for hire," as that
term is defined in the United States Copyright Act (17 USCA,
Section 101).
(iv) Any provision in this Agreement requiring
Executive to assign Executive's rights in any Invention to the
Company will not apply to any invention that is exempt under the
provisions of California Labor Code Section 2870, which
provides:
"(a) Any provision in an
employment agreement which provides that an employee shall assign,
or offer to assign, any of his or her rights in an invention to his
or her employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either: (1) 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 (2) result from any
work performed by the employee for the employer. (b) To the extent
a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is
against the public policy of this state and is
unenforceable."
(c) Non-Solicitation, Non-Interference .
While employed by the Company Executive agrees not to solicit,
attempt to solicit or accept business from, either directly or
indirectly, any vendor, customer, client, or supplier of the
Company (including affiliates) which has or could reasonably be
expected to have a material adverse effect on such vendor's,
customer's, client's or supplier's relationship with the Company.
While employed by the Company, and thereafter for the duration of
the Severance Period, Executive agrees not to induce or attempt to
induce any then existing employee or contractor to leave their
employment with or service to the Company (including affiliates),
or to employ or seek to employ any such person who was employed by
or a consultant to the Company during the preceding three (3)
months, provided that the latter restriction shall not apply with
respect to any person involuntarily
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terminated
by the Company, provided further that this exception shall not
release any such person from his/her obligations to the Company
(including affiliates).
(d) No Work For Certain Key Competitors
. Executive acknowledges that work for certain of the
Company’s key competitors necessarily will place the
Company’s Proprietary Information at the greatest risk of use
or disclosure and that such use or disclosure would result in
serious harm to the Company. Therefore, Executive agrees that for
the Severance Period he will not perform any executive management,
technical design, or supervisory services in the United States for
the Company’s key competitors as set forth in Exhibit B
hereto.
(e) Return of Materials . In the event
of termination of Executive's employment for any reason, Executive
will promptly deliver to the Company all Company equipment
(including, without limitation, any cellular phones, beeper/pagers,
computer hardware and software, fax machines and other tools of the
trade) and all originals and copies of all documents, including
without limitation, all books, customer lists, forms, documents
supplied by customers, records, product lists, writings, manuals,
reports, financial documents and other documents or property in
Executive's possession or control, which relate to the Company's
business in any way whatsoever, and in particular to customers of
the Company, or which may be considered to constitute or contain
Proprietary Information as defined herein, and Executive will
neither retain, reproduce, nor distribute copies thereof (other
than copies of Executive's rolodex or similar address and telephone
directories).
(f) Remedies for Breach . Executive
acknowledges that any breach by Executive of this Section 5 would
cause the Company irreparable injury and damage for which monetary
damages are inadequate. In the event of a breach or a threatened
breach of this Section 5, the Company will be entitled to seek an
injunction restraining such breach. In addition, in the event of a
breach of this Section 5, the Company's obligation to pay any
unpaid portion of the severance benefits (as set forth in Sections
4(b) – 4(f) of this Agreement will be extinguished. Nothing
contained herein will be construed as prohibiting the Company from
pursuing any other remedy available to the Company for such breach
or such threatened breach. Executive has carefully read and
considered these restrictions and agrees they are fair and
reasonable restrictions on Executive and are reasonably required
for the protection of the interests of the Company. Executive
agrees not to circumvent the spirit of these restrictions by
attempting to accomplish indirectly what Executive is otherwise
restricted from doing directly. Executive agrees that the
restrictions in subsections (c) and (d), above, are reasonable and
necessary to protect the Company’s trade secrets and that
they do not foreclose Executive from working in the printed circuit
board manufacturing and assembly industry generally or for any
employer outside of the United States, but only from working for
key competitors in the United States that will necessarily place
the Company’s trade secrets at the greatest risk of use or
disclosure. To the extent