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 Mikel H. Williams
(“Executive”).
A. Prior to the date of this Agreement,
Executive has been serving as the President and Chief Executive
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 be employed by the Company to
serve as President and Chief Executive Officer of the Company,
reporting to Company's Board of Directors (the
“Board”). As President and Chief Executive Officer,
Executive will, subject to the supervision and direction of the
Board, be responsible for (a) developing and implementing goals,
operating plans, policies and objectives for the Company; (b)
establishing the organizational structure for the Company and
delegating authority to subordinates as necessary; (c) representing
the Company to the financial community, customers, government
agencies, shareholders and the public; (d) directing and managing
the day-to-day operations and affairs of the Company; (e)
performing the duties and responsibilities customarily expected to
be performed by the chief executive officer of a publicly reporting
business entity; and (f) performing such other duties and functions
as are reasonably required and/or as may be prescribed by the Board
from time to time.
2. Standards of Performance . Executive
will at all times faithfully, industriously and to the best of his
ability, experience and talents perform all of the duties required
of and from him pursuant to the terms of this Agreement. Executive
will devote his full business energies and abilities and all of his
business time to the performance of his 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 his duties hereunder.
Notwithstanding the foregoing, Executive is permitted to spend
reasonable amounts of time to manage his 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 Three Hundred Seventy-Five Thousand Dollars
($375,000) calculated on an annualized basis, 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 review within the first three months after the end of
the fiscal year ending December 31, 2007 (“fiscal
2007”) and, thereafter, 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 shall be entitled to paid time off for vacation leave, in
an amount that Executive deems appropriate consistent with this
duties. Vacation shall be scheduled at reasonable times not in
conflict with Executive's duties hereunder. There shall be no
accrual of unused vacation time and Executive shall not be entitled
to payment for any unused vacation time upon the termination of his
employment with the Company. 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.
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(e) Relocation Payment;
Reimbursement of Relocation Costs . The Company will reimburse
Executive for any remaining relocation costs in accordance with the
terms of Executive's employment letter dated November 1,
2004.
(f) Reimbursement of Business Expenses .
The Company will promptly reimburse to Executive his reasonable,
customary and documented out-of-pocket business expenses in
connection with the performance of his duties under this Agreement,
and in accordance with the policies and procedures established by
the Company.
(g) Annual Physical . Executive agrees
to have an annual physical examination performed by a physician of
his choice during each year of this Agreement. The Company shall
reimburse Executive for the costs of his annual physical
examination.
(h) Automobile Allowance . The Company
will pay Executive an automobile allowance in the amount of $750
per month.
(i) 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 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 him 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 his 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 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 his position for
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consecutive calendar days or more with or
without reasonable accommodation ("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
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 he may be entitled
pursuant to the Company's benefit plans.
(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 his 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 he or his 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;
(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 his Employment for
reasonable and necessary Company-related business expenses incurred
on or before the termination date;
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(iv)
payment of the equivalent of the Base Salary Executive would have
earned over the next 24 months (the “Severance Period”)
(less necessary withholdings and authorized deductions) at his 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
to continue Executive's group health for the first twenty-four (24)
months following the termination date, including coverage pursuant
to the provisions of COBRA, if applicable; and
(vii) the number of outstanding unvested stock
options and restricted stock previously granted to Executive that
would have vested over the twenty-four (24) month period after such
termination as if Executive remained employed by the Company shall
vest upon such termination.
Executive shall not receive the payments and
benefits under subsections (iv)-(vi), above, unless he 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 twenty-four (24) months
of the termination date, the Company's obligation to pay premiums
for 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 his 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 the position of President or Chief
Executive Officer of the successor company reporting to the Board
of Directors of the successor to the Company, with compensation
and
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benefits
substantially similar to those enjoyed by Executive immediately
preceding the Change of Control. 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 the 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 (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 twelve 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 200% of the
Executive’s then-current Base Salary. 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.
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(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. 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 his 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 his 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 his
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
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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 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 his 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 his 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
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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 terminated by the
Company, and 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 accom