Employee Confidentiality, Non-Disclosure and Non-Competition Agreement - ADAM Software Inc. and David A. Tranberg
Employee Name: David A. Tranberg
A.D.A.M. SOFTWARE, INC.
EMPLOYEE CONFIDENTIALITY, NON-DISCLOSURE
AND NON-COMPETITION AGREEMENT
(LONG FORM - KEY EMPLOYEE)
PLEASE READ THIS AGREEMENT CAREFULLY. THIS AGREEMENT DESCRIBES THE
BASIC LEGAL AND ETHICAL RESPONSIBILITIES THAT YOU ARE REQUIRED TO OBSERVE AS AN
EMPLOYEE EXPOSED TO HIGHLY SENSITIVE TECHNOLOGY AND STRATEGIC INFORMATION.
THIS AGREEMENT, effective as of the date shown below, by and between A.D.A.M.
Software, Inc. ("Employer") and you, as an employee of Employer:
SECTION 1.
SCOPE OF DUTIES
1.1. EMPLOYMENT BY EMPLOYER AS SOLE OCCUPATION. Subject only to the
exceptions provided in this Agreement, you agree to devote your full business
time, attention, skill, and effort exclusively to the performance of the
duties that Employer may assign you from time to time. You may not engage in
any business activities or render any services of a business, commercial, or
professional nature for compensation for the benefit of anyone other than
Employer, unless Employer has given its consent in writing in advance. It is
the policy of Employer never to allow its personnel to work for any competitive
enterprise during their employment, including after hours, on weekends, or
during vacation time, even if only organizational assistance or limited
consultation is involved. This Agreement does not prohibit the investment of a
reasonable part of your assets in the stock of a company whose stock is traded
on a national stock exchange.
1.2. NONINTERFERENCE WITH THIRD-PARTY RIGHTS. Employer is employing
you with the understanding that (1) you are free to enter into employment with
Employer and (2) only Employer is entitled to the benefit of your work.
Employer has no interest in using any other person's patents, copyrights, trade
secrets, or trademarks in an unlawful manner. You should be careful not to
misapply proprietary rights that Employer has no right to use.
1.3. CONTINUANCE OF EMPLOYMENT. The faithful observance of this
Agreement by you is, and shall remain, a condition to your employment. YOUR
EMPLOYMENT IS TERMINABLE AT WILL BY EITHER YOU OR EMPLOYER AT ANY TIME.
Employer asks that as courtesy, at least two weeks' notice be given in advance
of any termination by you of employment. Employer reserves the absolute right
to make any changes in assignment, personnel, or employee benefits at any
time.
<PAGE> 2
SECTION 2.
OWNERSHIP OF EMPLOYEE DEVELOPMENTS
2.1. EXISTING PROPRIETARY RIGHTS. The patents, patent applications,
copyrights and trademarks listed on Schedule 1 hereto, are the only intangible
interests and properties that you own, or have any claim in, at the time of
execution of this Agreement. IF EMPLOYEE OWNS ANY PATENTS, PATENT
APPLICATIONS, COPYRIGHTS OR TRADEMARKS, THEY SHOULD BE LISTED ON SCHEDULE 1 AND
ATTACHED TO THIS AGREEMENT.
2.2. OWNERSHIP OF WORK PRODUCT.
a. Employer shall own all Work Product (as defined in
Section 2.2(e)). All Work Product shall be considered work made for hire by you
and owned by Employer.
b. If any of the Work Product may not, by operation of law,
be considered work made for hire by you for Employer, or if ownership of all
right, title, and interest of the intellectual property rights therein shall
not otherwise vest exclusively in Employer, you agree to assign, and upon
creation thereof automatically assign, without further consideration, the
ownership of all Trade Secrets (as defined in Section 3.2), U.S. and
international copyrights, patentable inventions, and other intellectual
property rights therein to Employer, its successors and assigns.
c. Employer, its successors and assigns, shall have the
right to obtain and hold in its or their own name copyright registrations,
trademark registrations, patents and any other protection available in the
foregoing.
d. You agree to perform, upon the reasonable request of
Employer, during or after your employment, such further acts as may be
necessary or desirable to transfer, perfect, and defend Employer's ownership of
the Work Product. When requested, you will
1. Execute, acknowledge, and deliver any requested affidavits and
documents of assignment and conveyance with respect to any Work
Product;
2. Assist in the preparation, prosecution, procurement, maintenance
and enforcement of copyrights and, if applicable, patents with
respect to the Work Product in any countries;
3. Provide testimony in connection with any proceeding affecting the
right, title, or interest of Employer in any Work Product; and
4. Perform any other acts deemed necessary or desirable to carry out
the purposes of this Agreement.
- 2 -
<PAGE> 3
Employer shall reimburse all reasonable out-of-pocket expenses incurred by you
at Employer's request in connection with the foregoing, including (unless you
are otherwise being compensated at the time) a reasonable per diem or hourly
fee for services rendered following termination of your employment.
e. For purposes hereof, "Work Product" shall mean all
intellectual property rights, including all Trade Secrets, U.S. and
international copyrights, patentable inventions, discoveries and improvements,
and other intellectual property rights, in any programming, documentation,
technology, or other Work Product that relates to the business and interests of
Employer and that you conceive, develop, or deliver to Employer at any time
during the term of your employment. Work Product shall also include all
intellectual property rights in any programming, documentation, technology, or
other work product that is now contained in any of the products or systems,
including development and support systems, of Employer to the extent you
conceived, developed, or delivered such Work Product to Employer prior to the
date of this Agreement while you were engaged as an independent contractor or
an employee of Employer. You hereby irrevocably relinquish for the benefit of
Employer and its assigns any moral rights in the Work Product recognized by
applicable law.
2.3. CLEARANCE PROCEDURE FOR PROPRIETARY RIGHTS NOT CLAIMED BY
EMPLOYER. If you ever wish to create or develop, on your own time and with
your own resources, anything that may be considered Work Product but to which
you believe you should be entitled to the personal benefit of, you are required
to follow the clearance procedure set forth on this section in order to ensure
that Employer has no claim to the proprietary rights that may arise.
Before you begin any development work on your own time, you must give
Employer advance written notice of your plans and supply a description of the
development under consideration. Unless otherwise agreed in a writing signed
by Employer prior to receipt, Employer shall have no obligation of confidence
with respect to such description. Employer will determine, in good faith,
within thirty (30) days after you have fully disclosed your plans to Employer,
whether the development is claimed by Employer as Work Product. If Employer
determines that it does not claim such development, you will be notified in
writing and may retain ownership of the development to the extent of what has
been disclosed to Employer. You should submit for further clearance any
significant improvement, modification, or adaptation so that it can be
determined whether the improvement, modification, or adaptation relates to the
business or interests of Employer.
Clearance under this procedure does not relieve you of the need to
obtain the written consent of Employer before engaging in business activities
or rendering business, commercial, or professional services for the benefit of
anyone other than Employer, as required in Section 1.1 hereof. Employer thus
- 3 -
<PAGE> 4
reserves the right to exercise greater control over development work that you
might consider doing for profit after hours, as opposed to mere hobby work
pursued in your spare time.
SECTION 3.
CONFIDENTIALITY
3.1. CONSEQUENCES OF ENTRUSTMENT WITH SENSITIVE INFORMATION. You
should recognize that your position with Employer requires considerable
responsibility and trust. Relying on your ethical responsibility and undivided
loyalty, Employer expects to entrust you with highly sensitive confidential,
restricted, and proprietary information involving Trade Secrets (as defined in
Section 3.2) and Confidential Information (as defined in Section 3.4). You are
legally and ethically responsible for protecting and preserving Employer's
proprietary rights for use only for Employer's benefit, and these
responsibilities may impose unavoidable limitations on your ability to pursue
some kinds of business opportunities that might interest you during or after
your employment.
3.2. TRADE SECRETS DEFINED. For purposes of this Agreement, a "Trade
Secret" is any information, including, but not limited to, technical or
nontechnical data, techniques relating to the preparation and production of
illustrations for use in Employer's computer software products, source codes,
flow charts, diagrams, technical documentation, scripts, algorithms, file
structures, metadata, data definitions and principles of operation relating to
or reflected in Employer's computer software products, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes, or
other information similar to the foregoing, that: (1) derive economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from their disclosure or use; and (2) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy. The term "Trade
Secret" will not include any information which constitutes Confidential
Information (as defined in Section 3.4).
The term Trade Secret will not include information that you can show by
competent proof (i) was known to you prior to disclosure by Employer; (ii) was
generally known to the public at the time Employer disclosed the information to
you; (iii) became generally known to the public after disclosure to you by the
Employer through no act or omission of yours; or (iv) was disclosed to you by a
third party having a bona fide right both to possess the information and to
disclose the information to you.
3.3. RESTRICTIONS ON USE AND DISCLOSURE OF TRADE SECRETS.
You shall hold in confidence at all times after the date hereof all Trade
Secrets of Employer and shall not disclose, publish or
- 4 -
<PAGE> 5
make use at any time after the date hereof of Trade Secrets without the prior
consent of Employer.
3.4. CONFIDENTIAL INFORMATION DEFINED. For purposes of this Agreement,
"Confidential Information" is any financial information, financial data,
financial plans, information concerning the relationship between the Company
and its customers or suppliers, or product plans or strategies of Employer
which are valuable to Employer and not generally known or available to
competitors of Employer.
3.5. USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION. You agree that
during the term of your employment by Employer, and for a period of two (2)
years following termination of your employment, you will hold in confidence all
Confidential Information and will not disclose, publish or make use of
Confidential Information without the prior written consent of Employer.
3.6. SCREENING OF PUBLIC RELEASES OF INFORMATION. In addition, and
without any intention of limiting your other obligations under this Agreement
in any way, you should not, during your employment, reveal any non-public
information concerning the technology pertaining to the proprietary products
and manufacturing processes of Employer (particularly technology under current
development or improvement), unless you have obtained approval from Employer in
advance. In that connection, you should submit to Employer for review any
proposed scientific and technical articles and the text of any public speeches
relating to work done for Employer before they are released or delivered.
Employer has the right to disapprove and prohibit, or delete any parts of, such
articles or speeches that might disclose Employer's Trade Secrets or other
Confidential Information or otherwise be contrary to Employer's business
interests.
3.7. EMPLOYER RIGHTS UNDER APPLICABLE TRADE SECRET LAW. Nothing in this
Agreement is intended to, nor shall it, diminish the Employer's rights
regarding the protection of Employers trade secrets pursuant to applicable
Georgia law.
SECTION 4.
RETURN OF MATERIALS
Upon the request of Employer and, in any event, upon the termination of your
employment, you must return to Employer and leave at its disposal all
memoranda, notes, records, drawings, manuals, computer programs, documentation,
diskettes, computer tapes, and, other documents or media pertaining to the
business of Employer or your specific duties for Employer, including all
copies of such materials. You must also return to Employer and leave at its
disposal all materials involving any Trade Secrets of Employer. This Section 4
is intended to apply to all materials
- 5 -
<PAGE> 6
made or compiled by you, as well as to all materials furnished to you by anyone
else in connection with your employment.
SECTION 5.
NON-INTERFERENCE WITH PERSONNEL RELATIONS
During my employment with Employer and for a period of one (1) year
afterwards, I will not knowingly solicit, entice or persuade any other
employees of Employer to leave the services of Employer for any reason.
SECTION 6.
NON-COMPETITION AGREEMENT
6.1. DEFINITIONS. For the purposes of this Section 6, the following
definitions shall apply:
a. "Employer Activities" shall mean all activities of the type
conducted, authorized, offered, or provided by you within one year prior to
termination of your employment. For purposes of reference, such activities at
the date of this Agreement include the business of producing, marketing,
promoting and distributing multimedia computer software programs which have as
their primary content anatomical, medical or health-related material (including
without limitation programs designed for educational markets and consumer
markets). The term "Employer Activities" shall include (without limitation)
the production, marketing and distribution of multimedia computer software
programs which compete directly with any of the computer software programs
distributed by Employer as of the date hereof or on the date of termination of
your employment.
b. "Noncompete Period" or "Nonsolicitation Period" shall mean the
period beginning on the date hereof and ending on the second (2nd) anniversary
of the date of termination of your employment with Employer.
c. "Territory" shall mean the areas where you worked within one year
prior to termination of your employment and as such shall include such areas
where any Employer Activities performed, supervised, or assisted in by you were
conducted and any area where customers or actively sought prospective customers
of Employer with whom you had material contact were present. For purposes of
reference, such areas at the date of this Agreement include the United States
of America, its territories and possessions.
6.2. TRADE NAME. You agree that during the Noncompete Period, you
shall not, directly or by assisting others, own, manage, operate, join, control
or participate in the ownership, management, operation or control of any
business conducted under
- 6 -
<PAGE> 7
any corporate or trade name of Employer or name similar thereto without the
prior written consent of Employer.
6.3. NONCOMPETITION.
a. Coverage. The parties hereto acknowledge that you conduct
Employer Activities throughout the Territory. You acknowledge that to protect
adequately the interests of Employer in the business of Employer, it is
essential that any noncompete covenant with respect thereto cover all Employer
Activities and the entire Territory.
b. Covenant. You hereby agree that you shall not, during the
Noncompete Period, in any manner (other than as an employee of or as a
consultant to Employer), directly or by assisting others, conduct Employer
Activities in the Territory. It is specifically understood and agreed that
accepting employment with, or acting as a consultant to, any one of the
following companies during the Noncompete Period would constitute a breach of
this covenant: IVI Publishing, Inc., or any other actual or potential
competitors of Employer where fifty percent (50%) or more of such competitor's
revenues are derived from multimedia computer software programs which have as
their primary content anatomical, medical or health-related material (such
companies are referred to as "Designated Competitors").
Notwithstanding the foregoing provisions of this Section 6.3 b.,
it is understood and agreed that you may accept employment with, or act as a
consultant to, a company (other than a "Designated Competitor") that is engaged
in Employer Activities in the Territory, so long as you have no direct and
material responsibility for, and involvement in, products which compete
directly with Employer's multimedia computer software programs which have as
their primary content anatomical, medical or health-related material (products
will be deemed to compete directly with Employer's products if they might be
purchased by consumers in lieu of the products of Employer). For example, you
would be permitted to be an employee of, or a consultant to, Broderbund
Software, Inc., so long as you did not have direct and material responsibility
for, and involvement in, the development, marketing or distribution of any
multimedia computer software programs which have as their primary content
anatomical, medical or health-related material.
Notwithstanding this Section 6.3(b), you shall be permitted to
(i) acquire up to five percent (5%) of any competitor of Employer whose common
stock is publicly traded on a national securities exchange or in the over-the-
counter market; or (ii) own shares of stock of Employer.
6.4. NONSOLICITATION. You hereby agrees that you shall not, during
the Nonsolicitation Period, in any manner (other than as an employee of or a
consultant to Employer), directly or by assisting others:
-7-
<PAGE> 8
a. solicit or attempt to solicit, any business from any of
Employer's customers, including actively sought prospective customers, with
whom you had material contact during your employment hereunder for purposes of
providing products or services that are competitive with those provided by
Employer; or
b. solicit or attempt to solicit for employment, on your
behalf or on behalf of any other person, firm or corporation, any other
employee of Employer or its affiliates with whom you had material contact
during your employment hereunder.
6.5. SEVERABILITY. If a judicial determination is made that any of
the provisions of this Section 6 constitutes an unreasonable or otherwise
unenforceable restriction against you, the provisions of this Section 6 shall
be rendered void only to the extent that such judicial determination finds such
provisions to be unreasonable or otherwise unenforceable. In this regard, you
and Employer hereby agree that any judicial authority construing this Agreement
shall be empowered to sever any portion of the Territory, any prohibited
business activity or any time period from the coverage of this Section 6 and to
apply the provisions of this Section 6 to the remaining portion of the
Territory, the remaining business activities and the remaining time period not
so severed by such judicial authority. Moreover, notwithstanding the fact that
any provision of this Section 6 is determined not to be specifically
enforceable, Employer shall nevertheless be entitled to recover monetary
damages as a result of your breach of such provision. The time period during
which the prohibitions set forth in this Section 6 shall apply shall be tolled
and suspended for a period equal to the aggregate quantity of time during which
you violate such prohibitions in any respect.
SECTION 7.
IMPLEMENTATION
7.1. SEVERABILITY. The covenants in this Agreement shall be construed
as covenants independent of one another and as obligations distinct from any
other contract between you and Employer. Any claim that you may have against
Employer shall not constitute a defense to enforcement by Employer of this
Agreement.
7.2. SURVIVAL OF OBLIGATIONS. The covenants in Sections 2 through 6
of this Agreement shall survive the execution and delivery of this Agreement
and the termination of your employment, regardless of who causes the
termination and under what circumstances the termination occurred.
7.3. SPECIFIC PERFORMANCE AND CONSENT TO INJUNCTIVE RELIEF. The
faithful observance of all covenants in this Agreement is an essential
condition to your employment, and Employer is depending upon absolute
compliance. Damages would probably be very difficult to ascertain if you
breached any covenant in this Agreement. This
- 8 -
<PAGE> 9
Agreement is intended to protect the proprietary rights of Employer in
many important ways. Even the threat of any misuse of the technology of
Employer would be extremely harmful, since that technology is essential to the
business of Employer. In light of these facts, you agree that any court of
competent jurisdiction may immediately enjoin any breach of this Agreement upon
the request of and proper showing by Employer.
7.4. CONSTRUCTION OF AGREEMENT. No provision of this Agreement or
any related document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other government or judicial
authority by reason of such party having or being deemed to have structured or
drafted such provision.
7.5. NOTICES. All notices required under this Agreement shall be
made in writing and shall be deemed given when (1) delivered in person, (2)
deposited in the U.S. mail, first class, with proper postage prepaid and
properly addressed, or (3) sent through the interoffice delivery service of
Employer, if you are still employed by Employer at the time.
7.6. RELATED PARTIES. This Agreement shall inure to the benefit of,
and be binding upon, Employer and its subsidiaries and its affiliates, together
with their successors and assigns, and you, together with your executor,
administrator, personal representative, heirs, and legatees.
7.7. MERGER. This Agreement merges and supersedes all prior and
contemporaneous agreements, undertakings, covenants, or conditions, whether
oral or written, express or implied, to the extent that they contradict or
conflict with the terms and conditions hereof. This Agreement is not intended
to modify or impair the effectiveness of the general rules and policies
Employer may announce from time to time, such as Employer's Trade Secret
Security Program, a copy of which you should already have received and read.
7.8. CHOICE OF LAW. This Agreement shall be governed by and enforced
under the laws of the State of Georgia.
7.9. NO WAIVER. The waiver by either party of a breach of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach of this Agreement.
7.10. HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
- 9 -
<PAGE> 10
IN WITNESS WHEREOF, you, as an employee of Employer, have entered and
executed this Agreement under seal, and Employer has accepted your undertaking.
EMPLOYEE:
/s/ David A. Tranberg
----------------------
Signature
/s/ David A. Tranberg
----------------------
Name (typed or printed)
Social Security No. - -
-----------
Address:
107 Barrington Hills Drive
--------------------------
Atlanta, GA 30350
--------------------------
Date: 01/25/96
-------------------------
Accepted:
EMPLOYER
A.D.A.M. SOFTWARE, INC.
By: /s/ Christine W. Finch
----------------------
Its: Human Resources Mgr.
---------------------
Date: January 25, 1996
---------------------
- 10 -