This Employment
Agreement (the “Agreement”) is made and entered into as
of March 16, 2006 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.
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 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, 2006 (“fiscal
2006”) 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 last day of any 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.
(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.
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(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 in an amount not
to exceed $1,500.
(h)
Automobile Allowance . The Company will pay Executive an
automobile allowance in the amount of $500 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 twenty
(20) 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 ten (10) 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 180 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))
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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;
(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”), payable in eighteen (18) equal monthly
installments starting on the first business day after six
(6) months from the termination date;
(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
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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 . 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 eligible for coverage 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, except as part of a
general change in compensation plans or benefits for all similarly
situated executives; (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 Board of Directors 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 the severance
agreement and general release document, attached as
Exhibit A .
(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)
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.
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 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)
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 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 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
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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, and thereafter for the duration of the Severance Period,
Executive agrees not to (i) 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;
or (ii) 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, provided further that this
exception shall not release any such person from his/her
obligations to the Company (including affiliates).
(d)
Non-competition . Executive agrees that during the term of
employment, and for any Severance Period thereafter, he will not,
without the Company’s prior written consent, directly or
indirectly, be employed by, be connected with, lend his name to or
have an interest of any kind in, whether as an employee,
consultant, officer, director, partner, stockholder, joint
venturer, or otherwise, any person or entity owning, managing,
controlling, operating, or otherwise participating or assisting in
a Restricted Business. For purposes of this Agreement,
“Restricted Business” is defined as printed circuit
board manufacturing and assembly. Notwithstanding this restriction,
Executive shall be entitled to invest in stock of other competing
public companies so long as his ownership is less than 1% of such
company’s outstanding shares.
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