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EMPLOYMENT AGREEMENT

Employment Agreement

EMPLOYMENT AGREEMENT | Document Parties: DDi Corp You are currently viewing:
This Employment Agreement involves

DDi Corp

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Title: EMPLOYMENT AGREEMENT
Governing Law: California     Date: 4/18/2007
Industry: Electronic Instr. and Controls     Sector: Technology

EMPLOYMENT AGREEMENT, Parties: ddi corp
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EMPLOYMENT AGREEMENT

      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”).

Recitals

      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.

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.

3.      

Salary, Benefits and Other Compensation .

 

 

(a) Base Salary . As an annual base salary (“Base Salary”) for all services

 

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.      

Proprietary Information Obligations .

 

 

(a) Proprietary Information and Confidentiality . Both before and during the term

 

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.

(b)      

Inventions Agreement and Assignment .

 

 

(i) Executive hereby agrees to disclose promptly to the Company

 

(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


 
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