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''''',i",..'';' ,,', , ',i."''',,','' ,.' ;'.~ " '...., .. -'. ..~:\':' , . . ". ::. '. '.. ..,. ,..', ,.,:~': , ,'U, "... ',' ",; "", ' '., ,...., , "', ...', """''';''':,'-:: :j;,,:;::: .,". . . .. , .; ai' :, . · " .':>;; ,:,":""''',':'':~:,;,\>,,'::'' ,'.. ~',', "', ">.,":'," ,.,.'\ :,::,:,; ,..' , " ,'.,'" ',' :" ' ", "" ,'I:', , ' '.. "' "". " ",: ,,,' , " , , ,,,'" " ;,i. 1M, \ ~t ,j " ..;.,,-, .:?:."li , . \/;. 'f i.." , , " ~' ~;,~ ,'"," . , ,;-:" " " . ,',""; I:; 'ooT'~!. " Ii: ,';," . ....-,;' ~) (~/ ,,; . ,'< ,"""'",,-'" . . ,,<-:," .,', As the allegation of misappropriation of "Help Desk Soliware", (hattel1ninology is a general name used by all technical assistance providers in the computer lield. The product used by PC Network was developed by Sam Fields, an employee of PC Network, Versions of the "Help Desk Soliware" products arc commercially available through "shrink wrap" products. Since no act by Wardropc or PC Network violated any contmctual and/or common law right of Intellimark, Plaintiff's Complaint should be dismissed. II IJRINCIPAL ISSUES OF LIABILITY a. Doug Wardrope b. Sam Fields c. Michael Gross d. Tim Copenhavcr e. Shaun Antram E, List of Exhibits wilh brief idcntification of cach. a, Stock Option Agrecment betwccn Wardropc :lJld Intcllimark, b. All documcnts rcceivcJ in discowry Irom Plaintiffs, VERIFICATION GREGORY M. LOWE, being duly sworn according to law. deposes and says that he is the Vice President of INTELLlMARK. a Delaware corporation, the Plaintiff herein, and that as such Vice President. he is authorized to make this Verification on its behalf and that the f:\ets set forth in the foregoing Amended Complaint arc true and correct to the best of his knowledge, infonnation and helieI'. and further understands that false statemcnts herein arc made subject to thc pcnalties of 18 Pa. C,S, Section 4904. relating to unsworn Hllsitication to authorities. INTELLll\lARK BY: CY -1'1, GREG( Y . LOWE Vice President ,," for income tax purposes the Shares shall be considered transferred to the Employee on the date on which the Option is exercised with respect to such Shares~ 5. Term of the Option. No portion of the Optionmay be exercised more than tcn (10) years (five (5) years if the Employee owns, immediately before the Date of Grant, stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary) from the Date of Grant of this Option, and may be exercised during such term only in accordance with the Plan and the terms Of this Option. 6. Method of Payment. Payment of the exercise price shall be by any of the , following, or a combination thereof, at the election of the Employee: ' (a) cash; (b) check; (c) surrender of other shares of Class B Common Stock of the Company which (i) either have been owned by the Employee for more than six (6) months on the date of surrender or were not acquired, directly or indirectly, from the Company and (ii) have a fair market value on the date of surrender equal to the exercise price of the Shares as to which the Option is being exercised. 7. Restrictions on Exercise. As a condition to the exercise of the Option, the Company may require the Employee .to make any representation and warranty to the Company as may be required (i) by any applicable law or regulation; or (ii) under the terms of the Plan or this Agreement. 'The Company may also place appropriate legends upon certificates for the Shares. 8. Termination of Status as an Emplovee. In the event of the termination of the Employee's Continuous Status as an Emplo;'ee; he may, but only within thirty (30) days from the date of such termination' (but in no event later than the date of expiration of the term of this Option as set forth in Section 5 above), exercise this Option to the extent that he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise this Option at the date of such termination,or ifhe does not exercise this Option within the time specified herein, the Option shall terminate. 9. Disability of the EllIployee. Notwithstanding the provisions of Section 8,above. in the .:vent of the termination of the Employee's Continuous Status as an Employee as a result of his total and permanent disability (as defined in Section 22(e)(3) of the Code), he may, but only within three (3) months from the date of termination of employment (but in no event later 'lhan the date of expiration of the tenn of this Option as set forth in Section 5 above), exercise this Option to the extent he was entitled to exercise it at the date of such termination, To the extent that he was not entitled to exercise this Option at the date of termination, or ifhe does not exercise this Option within the time specified herein, the Option shall terminate. .3- 10. Death of the Employee. Notwithstanding the ,provisions of Section 8 above, in the event of the death of the Employee who shall have been in Continuous Status as an Employee since the date of grant of this Option, the Option may be exercised, at any time within six (6) months following the date of death (but in no event later than the date of expiration of the tenn of this Option as set forth in Section 5 above) by the Employee's estate or by aperson who acquired. the right to exercise the Option by bequest or inheritance, but only to the extent the right to exercise had accrued at the date of death. 11. Re5lrictions on Trww:. (a) This Option may not be transferred in any mariner other than by will or by the laws of descent or distribution. I may be exercised during the lifetime of the Employee only by the Employee. The tenns of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Employee. . ' (b) The Employee hereby agrees, upon the request of the Company or the underwriters managing the initial public offering of the Company's securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any shares of the Company's Class B Common Stock (other than those included in the registration) without the prior written consent of the Company or such under.'lriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as the Company or underwriters may specify; provided that all officers and directors of the Company at the time of such public offering agree to a similar restriction, 12. :Early Disposition of Stock. The Employee understands that ifhe disposes of any Shares received under this Option within two (2) years after the Date of Grant or within one (1) year after such Shares were transferred to him, he will be treated for federal income t3.'< purposes as having'received ordinary income at the time of such disposition in an amount generally measured by the difference between the price paid for the Shares at the date of the exercise and the fair market value of the Shares at the date of disposition. The Employee hereby agrees to . notify the Company in writing within 30 days after the date of any such disposition, ARTICLE B. RESTRICTIONS ON THE SHARES 13. }testrictions on Transfers. The Employee agrees that he shall not, without the prior written consent of the Company, (a) sell, transfer, gift, alienate or in any other way dispose of any of the Shares; (b) pledge or otherwise encumber any of the Shares; or (c) designate any of the Shares into joint names with any other individual. .4. 14. Plltional Purchase llllon the Qccurrence of Certain Event~. Upon (a) the retirement of the Employee, (b) the termination of the Employee's employment with the Company by the Company for any reason, (c) the resignation of employment with the Company by the Employee, (d) the disability (as defined in Section 22(e)(3) of the Code) or death of the Employee, (e) an award of any of the Shares to the spouse ofthe Employee in a proceeding for equitable distribution of marital property upon divorce, or a similar court-ordered distribution of property hicident to the divorce of the Employee, (1) the filing of a petition in bankruptcy by or 'against the Employee, or the assignment by the Employee for the benefit ofms creditors, or the levy or sale of all or substantially all of the property of the Employee, (g) the transfer of all or a portion ofthe Shares by operation oflaw, or (h) a proposed sale, transfer, gift or other disposition of the Shares (individuallY, an "Optional purchase Event"), the Company shall have the right, but not the obligation, to purchase all or a portion of the Shares then held by the Employee for the purchase price per share set forth in Section 15, At the Company's discretion, it may assign its right to purchase all or a portion of the Employee'S Shares to one or more of the shareholders of the Company. The Employee shall immediately notify the Company of the occurrence of an Optional Purchase Event described in (e), (1), (g) or (h) above, 15. l'urehase Price. The purchase price per shares for the Shares purchased by the Company pursuant to Section 14 (the "purchase Price") shall be its Fair Market Value as of the last day of the fiscal year immediately preceding the year in which the Optional Purchase Event occurs. "Fair Market Value" shall mean the price per share determined by the certified public accountants then employed by the Company, such determination to be binding upon all of the parties, 16. ~ethod ofPaymcn!. Unless the parties agree otherwise in writing, Llle Purchase price shall be paid over ten (l0) years in consecutive, equal. an.'1ual installments, the first installment to be paid on the date of the closing, and the remaining installments to be paid on or before the same day of each year thereafter. Such indebtedness shall be represented by a promissory note from the Company bearing interest from the date of the closing at the lowest rate then permitted to be charged under Sections 483 and 1274 of the Code so as to avoid imputed interest, foregone interest and'original issue discount, and shall provide that the obligor shall have the privilege of prepaying all or any part thereofat any time, The certificates representing the Shares to be purchased shall be held in escrow by the Compl.UlY as security for the payment of the Purchase price until paid in full. The right to vote such Shares shall vest immediately in , !he Company upon payment of the initial installment of the purchase price at the closing; the . Company shall forfeit such voting rights during any period its note is in default. . 17. posing. A closing of the purchase of Shares by the Company pursuant to Section 14 hereof shall be held at the office of the Company, at a date and time mulU3l1y agreeable to the Employee and lhe Company, within sixty (60) days (240 days in the event of the Employee'S disability or death) following the Company's receipt of notice of the OCCUITCnce of an Optional -5- purchase Event and the calculation of the Purchase Pricc. The Employcc's share ccrtificatc(s) shall be delivered by the Employec to the Company, duly endorsed in blank, with any necessary transfer tax stamps duly affixed and canceled, together with such other instruments as counsel for the Company may reasonably request. The Purchase Price shall be paid as set forth in Scctionl6 hereof. 18. Legend. Each certificate for Shares issued to the Employee shall bear a conspicuous legend substantially as follows: THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE CONSTITUTE RESTRICTED SECURITIES AND MAY NOT BE SOLD . UNLESS REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, , AS AMENDED, (THE "ACT"), AND APPLICABLE STATE SECURITIES , LAWS OR UNLESS THERE IS AVAILABLE AN EXEMPTION FROM THE REGISTRATION REQU1REMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS. THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND REPURCHASE RIGHTS IN FAVOR OF THE COMPANY PURSUANT TO AN AGREEMENT DATED AS OF OCTOBER 31, 1996, BY AND BETWEEN THE SHAREHOLDER NAMED THEREIN AND THE COMPANY. AN EXTRACT OF THE RELEVANT PROVISIONS OF THE AFOREMENTIONED . AGREEMENT CAN BE OBTAINED FROM THE SECRETARY OF THE COMP ANY AT THE ADDRESS OF THE COMPANY'S REGISTERED OFFICE IN THE COMMONWEALTH OF PENNSYLVANIA. The Company shall cause the legend prescribed by this Section 18 to be affixed to each certificate representing shares of the Company hereafter issued to the Employee. 19.. Transfers Ineffe~. No purported salc, assignment, hypothecation, transfer, pledge, creation of a security interest in or lien on, encumbrance of, gift or other disposition of any of the Shares by the Employee in violation of the provisions of this Agreement shall be valid, and the Company shall not transfer any of the Shares on its books, nor shall any of the Shares be entitled to votc, nor shall any dividends be paid thereon, during the period of any such violation. The provisions of this Section shall be in addition to and not in lieu of any other remedies, legal or equitable, available to enforce this Agreement. ' ARTICLE C. INTELLECTUAL PROPERTY MA TIERS AJ"iD AGREEMEl\'T NOT TO COMPETE 20. Employee's Acknowledgments. The Employee recognizcs and acknowledges that: (a) in the course of the Employee's employment by the Company, it will be necessary for the Employee to acquire infonnation which could include, in whole or in part, infonnation concerning the Company's sales, sales volume. sales methods, sales proposals, customers and -6- .. prospective customers, identity of customers and prospective customers, identity of kcy purchasing personnel in the employ of customers and prospective customers, amour,t or kind of . customer's purchases from the Company, the Company's sources of supply, the Company's computer programs, computer spreadsheets, system documentation, special hardware, product hardware, related software development, the Company's manuals, formulae, processes, methods, machines, compositions, ideas, improvements, inventions or other confidential or proprietary information belonging to the Company or relating to the Company's affairs (collectively referred to herein as the "Confidential Information"); (b) the Confidential Information is the property of the Company: (c) the use, misappropriation or disclosure of the Confidential Information would constitute a breach oftNst and could cause irreparable injury to the Company; and (d) it is esseniial to the protection of the Company's good will and to the maintenance of the Company's competitive position that the Confidential Information be kept secret and that the Employee not disclose the Confidential Information to others or use the Confidential Information to. the Employee's own advantage or the advantage of others. The Employee further recognizes and acknowledges that it is essential for the proper protection of the business of the Company that the Employee be restrained (a) from soliciting or . inducing any employee of the Company to leave the employ of the Company, (b) from hiring or attempting to hire any employee of the Company, (c) from soliciting t!1.e trade of or trading with the customers and suppliers of the Company for any business purpose,'and (d) from competing against the Company for a reasonable period following the termination of the Employee's employment with the Company: The Employee further recognizes and understands that his duties at the Company may 'include the preparation of materials, including written or graphic materials, and that any such materials conceived or written by him shall be done as "work made for hire" as defined and used in the Copyright Act of 1976, 17 U.S.C. ~ I ~ llij. In the event of publication of such materials, the Employee understands that since tlle work is a "work made for hire", the Comp:l.'1)' will solely retain and oIVn all rights in said materials, including right of copyright, and that the Company may, at its discretion, on a case.by.case basis, grant the Employee by.line credit on such materials as the Company may deem appropriate. . 21. Non.Disclosure of Confidential Information. The Employee agrees to hold and . safeguard the Ctlnfidential Information in trust for the Company, its successors and assigns and agrees that he shall not, without the prior written consent of the Company, misappropriate or disclose or make available to anyone for use outside the Company's organil.'ltion at any time, either during his empioyment with the Company or subsequent to the termination of his employment \\ith the Company for any reason, including, without limitation, termination by the Company for cause or without cause, any of the Confidentillllnformation, whether or not developed by the Employee, except as required in the performance of the Employee's duties to the Company. 22. Illiclosure orWorks :md Invcnlions/Ass;enment of Paten Is. The Employee shall disclose promptly to the Company or its nominee any and a:l works, inventions. discoveries and improvements authorized, conceived or made by the Employee during his employment and .7- related to the business or activities of the Company, and hereby assigns and agrees to assign all his interest therein to the Company or its nominee. Whenever requested to do so by the Company, the Employee shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain Letters, Patents, or Copyrights of the United States or any foreign country or to otherwise protect the Company's interest . therein. . Such obligations shall continue beyond the termination of employment with respect to works, inventions, discoveries and improvements authored, conceived or made by the Employee during 'his employment, and shall be binding upon the Employee's assigns, executors, administrators and other legal representatives. 23. Return of Materials. Upon the termination of the Employee's employment with the Company for any reason, including without limitation termination by the Company for cause or without cause, the Employee shall promptly deliver to the Company all correspondence, drawings, blueprints, manuals, letters, notes, notebooks, reports, flow.charts, programs, .proposals and any documents cO\lceming the Company's customers or concerning products or processes used by the Company and, without limiting the foregoing, will promptly deliver to the Company any and all other documents or materials containing or constituting Confidential Information. " 24. Restrictions on Competition. The Employee covenants and agrees that during the period of the Employee's employment hereunder and for a period of one (1) year following the termination ofth~ Employee's employment, including, without limitation, termination by the Company for cause or without cause, the Employee shall not, in the United States of America, engage, directly or indirectly, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, in any Competing Business. For purposes of this Agreement, the term "Competing Business" shall mean any person, corporation or other entity engaged in the business of selling or attempting to sell any product or service which is the same as or similar to products or services sold by the Company, within the last two (2) years prior to termination of the Employee's employment hereunder. . 25. Non-Solicitation of Customers..an.d Suppliers. The Employee agrees that during his employment with the Company he shall not, directly or indirectly, solicit the trade of, or trade with, any customer, prospective customer, supplicr, or prospective supplier of the Company for any business purpose other than for the benefit of the Company. The Empl9yee further agrees that for one (I) year following the termination of his employment with the Company, including, without limitation, termination by the Company for cause or without cause, the Employee shall not, directly or indirectly, solicit the trade of, or trade \\;th, any customers or suppliers, or prospective customers or suppliers, of the Company. 26. lS.2n.SolkitnliorufEmpl~. The Employee agrees that, during his employment \vith the Company and for one (I) year following the termination of the Employee's employment \\;th the Company, including, \\;thout limitation, termination by the Company for cause or without cause, the Employee shall nOl, directly or indirectly, solicit or induce, or attempt .g. , . ',", ': > .;~., ~ ',',-;iF": <', :,.:~;:., ":"';,::";~"::'~~":~:":," ':',:"}~/."'''';7''~":~'" ,'0' :'~: :. .. ':, ,'. '., ,: ., ''':, :'. :~': -.':' ',', '.: , . . .. to solicit or induce, any employee of the Company to leave the Company for any reason whatsoever, or hire any employee oftheCompll1)Y. 27. . Work Made for Hire. The Employee agrees that in the event of publication by the Employee ofwritlen or graphic materials during his employment with the Company, the Company will retain and own all rights in said materials, including right of copyright. 28. !&nfidentiality of the Terms of this Agreement. The Employee covenants and agrees that he shall keep confidential and shall not disclose to anyone, including, without limitation, other employees of the Company, the existence of, as well as all material terms and conditions of, this Agreement,lncluding, without limitation, the number of Shares that may be exercised under the Option granted to the Employee. 29. No Prior Agreements. The Employee represents and warrants that he is not a party to or otherwise subject to or bound by the tenns of any contract, agreement or understanding which in any manner would limit or otherwise affect his ability to perform his obligations hereunder, includin'g, without limitation, any contract, agreement or understanding containing tenns and provisions similar in any manner to those contained in this Article C. The Employee further represents and warrants that his employment with the Company will not require him to disclose or us: any confidential infonnation belonging to prior employers or other persons or entities. 30. Employee's Abilities. The Employee represents that his experience and capabilities are such that the provisions of this Article C. will not prevent him from earning his livelihood, and acknowledges that it would cause the Company serious and irreparable injury and cost if the Employee were to use his ability and knowledge in competition with the Company or to ctherwisebreach the obligations contained in this Article C, 31. Remedie~. In the event ofa breach by the Employee of the terms ofthis Agreement, the Company shall be entitled, if it shall so elect, to institute legal proceedings to obtain damages for any such breach, or to enforce the specific perfonnance of this Agreement by the Employee and to enjoin the Employee from any further violation of this Agreement and to exercise such remedies cumulatively or in conjunction with all other rights and remedies provided by law. The parties acknowledge and agree that, in the event of a breach by the Employee of the tenns of this Agreement"the extent of the Company's damages would b,e extremely difficult to ascertain. To avoid this problem, the parties agree that in the event of a breach by the Employee, the Employee shall, at the Company's discretion, forfeit all rights to the Option granted to the Employee under Article A. above, including, without limitation, all rights to Shares previously purchased under the Option as well as all future rights to purchase Shares. The parties agree that forfeiture of the Employee's Option as aforesaid shall be in addition to any other relief to which the Company might othenvise be entitled to under the tenns of this Agreement. Specifical!y, the Employee acknowledges that the remedies at law for any breach by him of the provisions of this Agreement (including the forfdture of his Options) may be inadequate and that the Company shall be entitled to injunctive relief against him in the event of any breach. -9.. 32. . Autborization to Modify Restrictions. It is the intention of the parties that the provisions of Article C. hereof shall be enforceable to the fullest extent permissible under applicable law, butthat the unenforceability (or modification to conform to such law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder thereof. If any provision or provisions hereof shall be deemed invalid or unenforceable, either in whole or in part, this Agreem.ent shall be deemed amended to delete or modify, as necessary, the offending provision or provisions a'nd to alter the bounds thereof in order to render it valid and enforceable. 33. Tolli"!: Period. The non-competition, nondisclosure and non-solicitation obligations contained in Article C.hereof shall be extended by the length of time during which the Employee shall have been fu breach of any of the provisions of such Article C, ' 34. Employer Violation Not a Defense. In an action by the Company to enforce this Agreement, any claims asserted by the Employee against the Company shall not constitute a defense to the Company's action. ARTICLE D. RELEASE 35~ Employee Release. In consideration of the grant of the Option to the Employee as set forth in Article A, above, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Employee, the Employee hereby remises, . . releases and forever discharges the Company, its officers, directors and shareholders, and their respective heirs, personal representatives, successors and assigns (collectively, the "Released Parties") of and from any and all actions, suits, proceedings, debts, damage, costs, claims, demands, causes of action and/or liabilities of any nature or description whatsoever in law of equity which he may have or may ever have had from the beginning of time to the present, . known or un1'.nO\\l1, real or imaginary, actual or potential, by re:lSon of any actions of any kind taken by any of the Released Parties with respect to the Employee's ability to acquire to receive. (in any manner whatsoever) an equity interest in the Company, except for the Company's obligation to fulfill the terms and provisions of Article A. above. ARTICLE E. S CORPORATION PROVISIONS 36... Election. Each Employee acknowledges that the Company has entered into this Agreement with the understanding and expectation that the Company will be taxed as an "s corporation" under (i) the tax laws of the United States; and (ii) the tax laws of the Commonwealth of Pennsylvania. The Employee shall take all necessary and appropriate steps and shall execute all necessary and appropriate consents and other documents required to continue the Company's election to be taxed as an S corporation effective under the laws of the United States and the Commonwealth of Pennsylvania. The Employee shall not take any action which would preclude the Compeny from qualif)'ing as an S corporstion under the laws of the United States or the Commonwealth of Pennsylvania. -10- " .. 37. Power of Attorney. The Employee hereby irrevocably constitutes and appoints . the President of the Company, or any successor, with power' of substitution, his true and lawful attorney-in-fact and agent, to execute, acknowledge, verify, swear to, deliver, record and file, in . the Employee's name, place and stead, all consents, instruments, documents and certificates that. may from time tO.lime,be required by the laws of the United States or the Commonwealth of Pennsylvania, to continue the valid existence of the Company as an S corporation (or similar status). This power-of-attomey is a durable power and shall not be terminated upon the . incapacity, disability or incompetence of the Employee and shall not be revoked and shall survive the assignment or transfer by the Employee of all or part of his Shares. The existence of this power shall not preclude execution of any such instrument by the Employee in his individual capacity on any such matter. . ARTICLE F. MISCELLANEOUS 38. ' Entire Agreement. 'This Agreement represents the entire agreement of the parties and may be amended only by a writing signed by each of them, 39. Governing Law. This Agreement shall be govemed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, 40. Consent to Jurisdiction. The Employee hereby irrevocable submits to the personal jurisdiction of the United States District Court for the Middle District of Pennsylvania or the Courts of Cornmon Pleas of Dauphin or Cumberland County, Pennsylvania in any action or proceeding arising out of or relating to this Agreement, and the Employee hereby irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in either such court. 41; Service ofPrQttU. The Employee hereb)' irrevocably consents to the service of any summons and complaint and any other process which may be served in any action or proceeding arising out of or related to this Agreement brought in the United States District Court for the Middle Di,strict of Pennsylvania or the Courts orCommon Pleas of Dauphin or Cumberland County by the mailing by certified or registered mail of copies of such process to the Employee at his address as set forth on the signature page hereof. 42. Venue. The Employee hereby irrevocably waives any objection which he no':'" or hereafter rnayhave to the laying of venue of any action or proceeding arising out of or relating to this Agreement brought in the United States District Court for the Middle District of Pennsylvania or the Courts of Common Pleas of Dauphin or Cumberland County, Pennsylvania and any objection on the ground that any such action or proceeding in either of such Courts has been brought in any inconvenient forum, Nothing in this Section 42 shall affect the right of the Comp.my to bring any Ilc~ion or proceeding against the Employee or his property in the courts of other jurisdictions. -11- " 43. Aweement BindinK. The obligations of the )::mployee under this Agreement shall continue after the termination of his employment with the Company for any reason, with or without cause, and shall be binding on his heirs, executors, legal representative and assigns and shall inure to the benefit ohny successors and assigns of the Company. 44. Counte'llorts. Section Headings. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.. The section headings of this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any of the provisions hereof. 45. fuferences to Gender. Although, for the sake of convenience, all references in this Agreement to the gender or the Employee are to the masculine gender, the parties acknowledge and agree that al1 such references shall include the feminine gender. THE EMPLOYEE ACKNOwLEDGES AND AGREES THAT THE EXERCISABILITY OF OPTIONS PURSUANT TO ARTICLE A. HEREOF IS EARNED ONLY BY CONTINUING El\1l'LOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING mRED, BEING GRANTEDTIDS OPTION OR ACQUIRING SHARESHEREUNDER).THEEMPLOYEEFURTHERACKNO~EDGESAND AGREES THAT NOTHING IN TmS AGREEMENT, NOR IN THE COMPANY'S PERFORMANCE INCENTIVE STOCK PLAN WIDCH IS INCORPORATED HEREIN .' .BY REFERENCE, SHALL CONFER UPON THE EMPLOYEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH IDS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE IDS EMPLOYMENT AT ANYTIME WITH OR WITHOUT CAUSE. The Employee acknowledges receipt of a copy of the Plan and certain ir.formation related thereto and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Option subject to al1 of the terms and provisions thereof. The Employee has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice. of counsel prior to executing this Agreement and fully understands al1 provisions of the Agreement, which provisions the Employee acknowledges and agrees are reasonable and enforceable to protect the Company's interests. The Employee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan. The Employee further agrees to notify the Company upon any change in the residence address indicated below. -12- 5, IntelliMark purchased all of the assels of the company known as "KnowledgeSoli. . Inc.:' said assets including any employment ngreements between KnowledgeSoft. Inc" and its thcn currcnt employces, 6. Defendant Wardrope was an employee of KnowledgeSoft. Inc.. and then IntelliMark, and signed an agreement dated October 31. 1996. labeled an Incentive Agreement (hereinafter referred to as "Agreement"), Attached hereto and marked as Exhibit ^ is a true and correct copy of the Agreement. 7, Under the terms of the Agreement entered into between Defendant Ward rope nnd KnowledgeSoft, Inc., Defendant Wardrope \Vas exposed to certain confidential infonnation as described in that Agreemcnt, and signcd a provision not to compete with the company following his cessation of employment with the company, 8, The information disclosed to Defcndant Wardrope during the course of his cmployment was confidential and its use or misappropriation by Defendant Wardrope after his employment causes irrcparJblc hann tolntclliMark, 9, Delcndant Wardrope Icli his employment with IntelliMark on or about December 16, 1997. 10, Delcndant Wardmpe wcnt 10 work with peN following his employmcnt with Intcllil\1ark. .., , ", ~', ,;,: .>~ ;~ ,<'::' ~ "",:,:-:".",:,- : \~ ....,,:'.:>.".' :';,~' -.;1,' ',"', ,", ".'.., <- ' " ~. 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'::":' ,", ,I' "" ,";'y ,'\,__, .',;",,,:,',..;:,:,, ,", ,";I::")": :'.1 ' "';"'," \::1:" ,:,:,' :" tc , .: ,.' . .,';' '.: ::,:< < ',A',!;" ,"-' ":",',:;1 ~:, ":::':"';::"','-:': ','~:: "",'::Yi..:::i, ,,' " ',','" ..>" ' ""-"':' '1:,'-- , "'\,i',\" ':: : "::;;'-,,-" ',,: ",',,' ': ','., , "'''.: ''':'::,.. ',:,' \) :'" "''':':,;'--,', '" ',"'" ,":', ' : , ..: '. , "'. '. ....r \:,}'!,':(;,,:i:,,; ;, '; ;;, ':};J ' ,.., . '. : c: >,:!\ :-:. . . .' , '. ,'ii'> .... ". ',,,, . . . ," ...:,' ..... ...., . . ..-', .... . "':,2< .:.. .i",.::?.' ..:: . '. '. . .' . '.!. ,; . ' 5;j~;i;. '.. '. . '" , '.';.; ",,:' ,'\, ." "",,' i"""".". .~.. c., . ;:,:, ""," .. >,. . ..... .' . ....- ,~"',..~ "}. \';{. , ,".to"... " . . '. _ ... .. .. ~.."T.; " -..- .. . APR" 0 ....,. "'" "P. " . . · . '.' J~ii;r .. . . 19 J document. 2 Q Paragraph Number 23 on page 8, the bold heading 3 say return of materials. And you can tell me if I'm wrong, 4 essentially it's indicating that when you leave employment 5 you have to return everything? 6 A Urn-hum. 7 Q Of the company to the company? 8 A Right. 9 Q Do you understand that? 10 A Yes, I do. 11 Q And when you left the company in December, did 12 you return everything to the company? , , Everything was left there. 13 A' 14 Q Did you take any help desk application software 15 when you left? 16 A I had knowledge of how to design a help des~ 1: software application in ~y mind, . but I took nothing with 18 me. 19 Q And your access to that help desk application 20 software was obtained when you were working with 21 KnowledgeSoft? 2:: A I don't. understand the question. 23 Q You said you had something in your mind. You 2.l ,^rere using help desk application soft....:are when you were 2S. employed by KnowledgeScft; io that correct? L.... ......._._....._.._.............-.-..--.- -.""....-.----- I ---~ 20 1 ~ .~ 1...... 3 4 5 ..::;. I designed the help desk software. I didn't use Q You designed it? A Yes, sir. Q And you designed it while you were in the employ 6 of KnowledgeSoft? 7 A Yes, sir. S Q Was that help desk application software software 9 that was used by KnowledgeSoft while you were there? 10 A Yes, it was used. 11 Q Did you believe that to be something that was 12 owned by KnowledgeSoft or something that was yours? , , 13 A' Yes. That's something owned by KnowledgeSoft. 14 Q After you left KnowledgeSoft, is it your 15 testimony today that you did or did not use that software? 16 A I did not use that software. , 17 Q .Did you change that software and use it later? IS A I wrote another application for our company. 19 Q When you mean our company, you mean the company 20 you're employed with now? 21 A Right; currently employed with. I assisted in 22 that writing. ~1 "-- Q And that's with PC Networks, Inc.? 24 A Yes. 25LQ Did you use any of the software .... Fit EQ-'C'fF\CE ^...'..: " ,,' "v.... ''''''O'''R'J \., !_, -I:' .':. ,.\.'1 I S'J OCT 20 . r;i~ 10: :-;2 C'u' ",: " ,..[. C"-.' ".n'v 1.'II.....1I',.n .,~, '.~I'_.";l", Pl:)\i~SYt:,,.'./'. ;\1\ 1\ . , " . .', ". ". ,.' - ,c,:." ;'."'}'" ::/ '-j" ;, "':""","""''':'''', ~.:'~ ''':,' "',-' ~ u:;.,c'" ?,... ';; " .". . ' .,',' . .'.. '. .' . ,{ .'~. '. .' l' '. INTELLlMARK. IN TI IE COURT OFCOMMON PLEAS OF CUMBERLAND COUNTY. PENNSYLVANIA ) ) ) ) ) ) ) ) CIVIL ACTION - LA W ~ ". ;, :~.'. '~\.~:':~,.-\, "~;:"":\;;',"",'~"';,::"~":".':':."':':':::"';".;.< "'-:.',::';:'; .\',:'~.",>' ~'.,"::"~" """': .' Plainti ff VS. NO, 98-6946 CIVIL TERM DOUG W ARDROPE and PC NETWORK. INC.. Dcfendants I'ETITION TO FILE AMENDED COMI'LAINT AND NOW comcs the PlaintitTwho files this Pctitionto file an Amcndcd Complaint and in supportthcrcof avers thc following: 1. PlaintitTfiled a Complaint on Dcccmbcr 9.1998. 2. PlaintifT is in the busincss of providing information computcr technology to various customers. 3. Defendant Ward rope is a f0I111Cr employec of Plaintiff: 4. Plaintiff alleges in its original Complaint that Defendant Wardrope becamc cmployed by Defcndant PC Network, Inc" in violation of a valid agrcement prohibiting Dcfendant Wardrope from directly or indircctly becoming engaged or otherwise employed by a company competcs with Plaintifff'1r business. that is the busincss ofcomputcr tcchnology. 5. During the coursc ofdiscovcry. and spl'cifieally Dcfl'ndant Wardrope's deposition, PlaintilT Icaml'd for thl' firsttimc that Defendant WardropI.' took sofiwarc and knowlcdge of so/iware which was dewloped by Plaintiff and has utilizcd same f()r the bl'ndit of his ncw cmploycr. 6, P)aillliffwas unaware ()/'these actions untillhc dl'position. , , 18, Thc hiring of Michacl Gross by Defcndant Wardropc or thc company who be is acting on bchalf, was a breacb of the Agrecment bctween IntelliMark and Dcfendant Wardrope. 19. IntclliMark has been damaged as a result ofthcse two breaches by Dcfendant Wardrope in that it incurred costs for biring these two individuals initially to work for IntclliMark and needed to pay a fee to hire replacements for them. 20. The fee originally paid to place those two employecs with IntclliMark was $1,500.00 each for a total of $3,000,00, and the amount incurred by IntelliMark to replace those two employees aftcr being hired by Defendant Ward rope was $1,500,00 each lor a total 01'$3,000.00 for both employees. 21. In addition to the fees incun'ed by IntelliMark paid to initially hire these individuals , and replace thcm, IntelliMark lost the revenues ofMr. Gross for a period of four (4) weeks, that bcing the time it took for IntclliMark to replace him, 22, Mr. Gross' billable rate while at IntelliMark was $100.00 per hour. 23. During thc four weeks that IntelliMark was forced to find a replacement for Mr. Gross, it lost the revenue hours Mr. Gross would have performed bad he remained with IntelliMark and not been hired by Defendant Ward rope, those bcing a total of 120 hours. 24. As a result of the breach by Defendant WanJrope in hiring Mr. Gross, IntelliMark lost revenues from Mr. Gross in the total amount of SI2.000.00. 25. The total amount ofdamagcs owed to IntclliMark as a result of the breach by Defendant Ward rope under this provision of the Agrecmcnt included the fecs 1i.1r hiring the 4 31. Defendant Ward rope either directly, or through the company where he is employed, PCN, placed Mr. Copenhaver at the Pennsylvania Department of Public Weltilre soon after Mr. Copenhaver lell the employment oflntclliMark, and had Mr. Copenhaver do similar duties for the Pennsylvania Department of Public Welfare that he did when he was under thl~ employ of IntelliMark. 32. Delendant Wardrope was aware of the contract in place with the Pennsylvania Department of Public Welfare when he worked {(Ir IntelliMark and was privy to all of the terms and conditions of the contract. including the scope of the work for the Pennsylvania Departmel11 of Public Welfilre and the per-hour cost lor that work, 33. Mr. Copenhaver. among other duties. was providing help desk services to the Pennsylvania Department of Public Welfare while he was under the employ oflntelliMark at an hourly list rate of $50.00 per hour. 34. Defendant Wardrope, by hiring Mr. Copenbaver frol11lntelliMark and placing him with the Pennsylvania Depal1ment of Public Weltare breached the tenns of the Agreement between IntelliMark and Defendant Ward rope and used eonlidential information Io secure work for PCN with the Pennsylvania Departmenl of Public Welfare which was the same work or substantially the same work as completed by IntelliMark prior to Mr. Copenhaver leaving their employment. 35, Mr. Copenhaver was placed on the Pennsylvania Dep:1l1ment of Public Wellare aCCOllnt on September I. 1995. and he was working at that time for PCN, 6 47. Dcfcndant PCNhad no privilegc orjustiticationthat would pcrmit its cmploycc, Defcndant Wardrnpc. to hirc Mr, Copcnhavcr IrOlll1ntclliMark so that Defcndant peN could do thc PC tcchnicallhclp dcsk scrviccs for thc Pcnnsylvania Dcpartmcnt of Public Welfarc that was prcviously complctcd by IntclliMark. 48. Prior to thc hiring of Mr. Copcnhavcr by Dcfcndant \Vardrapc IromlntclliMark, Dcfcndant peN had not pcrformcd PC tcchni(~allhelp dcsk work of thc typc and in thc scopc that it was ablc to pcrform allcr it hircd Mr. Copcnhavcr IromlntclliMark to do thosc scrviccs. 49. IntclliMark has bccn damagcd inthc amount 01'$24,000,00, which rcprcscnts thc amount of billings thatlntclliMark was prcvcntcd lI'om pcrforming for thc Pcnnsylvania Dcpartmcnt of Public Welfarc as a rcsult of Dcfcndant PCN pcrmilting its cmployce to hirc Mr. Copcnhavcr fromlntclliMark. 50. Thc damagcs incurrcd by IntclliMark wcre a dircct and sole rcsult from Dc fend ant PCN's conduct in intcrfering with thc prospcetive contractual relationship betwccnlntelliMark and the Pennsylvania Dcpartmcnt lIf Public \Vcll~m: by pcrlllilting its employee, Defendant Wardrope, to hirc Mr. Cop(~nha\'Cr from IntclliMark so that thc cmploycc could pcrform thc samc scrviccs to thc Pcnnsylvania Dcpartmcnt of Public Wcllarc as previously providcd by IntclliMark whcn it kncw that thc cmploymcnt agrecmcnt bctwccn Dcfcndant PCN and its cmployccs prcvcnted said hiring from occurring. WIIEREFORE, Plaintitl'dcmandsjudgmcntagainst Dcfcndant peN in thc amount of $24.000.00. plus intercst. plus ('(Ists of suit. for income tax purposes the Shares shal1 be considered transferred to the Employee on the date. on which the Option is exercised with respect to such Shares. 5. Term of the Option.' No portion of the Option may be exercised more than ten (10) years (five (5) years if the Employee owns, immediately before the Date of Grant, stock representing more than tcn percent (10%) of the total combined voting power of 0111 classes of stock of the Company or of any Parent or Subsidiary) from the Date of Grant of this Option, and may be exercised during such term only in accordance with the Plan and the terms dfthis Option. 6. Method of Payment. Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Employee: (a) cash; (b) check; (e) surrender of other shares of Class B Common Stock of the Company which (i) either have been owned by the Employee for more than six (6) months on the date of surrender or were not acquired, directly or indirectly, from the Company and (H) have a fair market value on the date of surrender equal to the exercise price of the Shares as to which the Option is being exercised. 7. ~estrictions on Exercise. As a condition to the exercise of the Option, the Company may require the Employee to make any representation and warranty to the Company as may be required (i) by any applicable law or regulation, or (ii) under the terms of the Plan or this Agreement. The Company may also place appropriate legends upon certificates for the Shares. 8. Termination of Status as an Emplovee. In the event of the termination of the Employee's ContinuoUs Status as an Employee, he may, but only within thirty (30) days from the date of such termination' (but in no event later than the date of expiration of the term of this Option as set forth in Section 5 above), exercise this Option to the extent that he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise this , Option at the date of such termination, or ifhe does not exercise this Option ....ithin the time specified herein, the Option shall terminate. 9. Disability urthe Employee. Notwithstanding the provisions of Section S,above, in the event of the termination of the Employee's Continuous Status as an Employee as a result of his total and permanent disability (as defined in Section 22(e)(3) of the Code), he may, but only within three (3) months from the date of termination of employment (but in no event later .1han the date of expiration of the term of this Option as set forth in Section 5 above), exercise this Option to the extent he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise this Option at the date of termination, or ifhe does not exercise this Option within the time specified herein, the Option shal1 terminate. .3. 10. Death oftb!: Employee. Notwithstanding the ,provisions of Section 8 above, in the event of the death ofthc Employee who shall have been in Continuous Status asan Employee since the date of grant of this Option, the Option may be exercised, at any time within six (6) months following the date of death (but in no event later than the date of expiration of the tenn of this Option as set forth in Section 5 above) by the Employee's estate or by a person who acquired' the right to exercise the Option by bequest or inheritance, but only to the extent the right to exercise had accrued at the date of death. 11. Re~trietillns on Transfer. (a) lIDs Option may not be transferred in any manner other than by will orby the laws of descent or distribution. I may be exercised during the lifetime of the Employee only by the Employee. The tenns of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Employee. (b) The Employee hereby agrees, upon the request of the Company or the underwriters managing the initial public offering of the Company's securities, not to sell, make any short sale ot: loan, grant any option for the purchase of, or otherwise dispose of any shares of the Company's Class B Common Stock (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for ,such period of time (not to exceed 180 days) from the effective date of such registration as the Company or underwriters may specify; provided that all officers and directors of the Company at the time of such public offering agree to a similar restriction. 12. ~ Disposition of Stock. The Employee understands that ifhe disposes of any Shares received under this Option within two (2) years after the Date of Grant or within one (I) year after such Shares were transferred to him, he will be treated for federal income tax purposes as having'received ordinary income at the time of such disposition in an amount generally measured by the difference between the price paid for the Shares at the date of the exercise and the fair market value of the Shares at the date of disposition. The Employee hereby agrees to notify the Company in writing within 30 days after the date of any such disposition. ARTICLE B. RESTRICTIONS ON THE SHARES 13. Restrictions on Transfers. The Employee agrees that he shall not, without the prior written consent of the Company, (a) sell, tr:msfer, gift, alienate or in any other way dispose of any of the Shares; (b) pledge or othe~wise encumber any of the Shares; or (e) designate :my of the Shares into joint names with any other individual. -4. 14. Optional Purchnse Upon the Occurrence of Certnin Events. Upon (a) the retirement ofthe Employee, (b) the termination of the Employee's employment with the Company by the Company for any reason, (c) the resignation of employment with the Company by the Employee, (d) the disability (as defined in Section 22(e)(3) of the Code) or death of the Employee, (e) an award of any of the Shares to the spouse of the Employee in a proceeding for equitable distribution of marital property upon divorce, or a similar court-ordered distribution of property incident to the divorce of the Employee, (f) the filing of a petition in bankruptcy by or 'against the Employee, or the assignment by the Employee for the benefit of his creditors, or the levy or sale of all or substantially all of the property of the Employee, (g) the transfer of all or a portion of the Shares by operation oflaw, or (h) a proposed sale, transfer, gift or other disposition of the Shares (individually, an "Optional Purchase Event"), the Company shall have the right, but not the obligation. to purchase all or a portion of the Shares then held by the Employee for the purchase price per share set forth in Section 15. At the Company's discretion, it may assign its rightto purchase all or a portion of the Employee's Shares to one or more of the shareholders of the Company. The Employee shall immediately notify the Company of the occurrence of an Optional purchase Event described in (e), (f), (g) or (h) above. 15. Purchnse Price. The purchase price per shares for the Shares purchased by the Company pursuant to Section 14 (the "Purchase Price") shall be its Fair Market Value as of the last day of the fiscal year immediately preceding the year in which the Optional Purchase Event ' occurs. "Fair Market Value" shall mean the price per share determined by the certified public accountants then employed by the Company, such determination to be binding upon all of the parties. 16. Method of Payment. Unless the parties agree otherwise in writing, the Purchase Price shall be paid over ten (10) years in consecutive, equal, an!lual installments, the first installment to be paid on the date of the closing, and the remaining installments to be paid on or before the same day of each year thereafter. Such indebtedness shall be represented by a promissory note from the Company bearing interest from the date of the closing at the lowest rate then permitted to be charged under Sections 483 and 1274 of the Code so as to avoid imputed interest, foregone interest and'original issue discount, and shall provide that the obligor shall have the privilege of prepaying all or any part thereof at any time. The certificates r~presenting the Shares to be purchased shall be held in escrow by the Company as security for the payment of the purchase Plice until paid in full. The right to \'ote such Shares shall vest immediately in ,~e Company upon payment of the initial installment of the Purchase Price at the closing; the Company shall forfeit such voting rights during any period its note is in default. 17. Closin\:. A closing of the purchase of Shares by the Company pursuant to Section 14 hereof shall be held at the office of the Company, at a date and time mutu.ll1y agreeable to the Employee and the Company, within sixty (60) days (240 days in the e\'ent of the Employee's disability or death) folloYt;ng the Company's receipt of notice oflhe occurrence of an Optional ..5- purchase Event and the calculation of the Purchase Price. The Employee's share certificate(s) shall be delivered by the Employee to the Company, duly endorsed in blank, with any necessary transfer taX stamps duly affixed and canceled, together with such other instruments as counsel for the Company may reasonably request. The Purchase Price shall be paid as set forth in Section 16 hereo f. 18. Legend. Each certificate for Shares issued to the Employee shall bear a conspicuous legend substantially as follows: THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE CONSTITUTE RESTRICTED SECURITIES AND MAY NOT BE SOLD UNLESS REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, , AS AMENDED, (THE "ACT"), AND APPLICABLE STATE SECURITIES , LAWS OR UNLESS THERE IS AV AlLABLE AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE 8T A TE SECURITIES LAWS. THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND REPURCHASE RIGHTS IN FAVOR OF THE COMPANY PURSUANT TO AN AGREEMENT . DATED AS OF OCTOBER 31, 1996, BY AND BETWEEN THE SHAREHOLDER NAMED THEREIN AND THE COMPANY. AN EXTRACT OF THE RELEVANT PROVISIONS OF THE AFOREMENTIONED AGREEMENT CAN BE OBTAINED FROM THE SECRETARY OF THE COMPANY AT THE ADDRESS OF THE COMPANY'S REGISTERED OFFICE IN THE COMMONWEALTH OF PENNSYL V ANlA. The Company shall cause the legend prescribed by this Section 18 to be affixed to each certificate representing shares of the Company hereafter issued to the Employee. 19.' I.t:ll.rIsft~. No purported sale, assignment, hypothecation, transfer, pledge, creation of a security interest in or lien on, encumbrance of, gift or other disposition of any of the Shares by the Employee in violation oflhe provisions of this Agreement shall be valid, and the Company shall not transfer any of the Shares on its books, nor shall any of the Shares be entitled to vote, nor shall any dividends be paid thereon, during the period of any such violation. The provisions of this Section shall be in addition to and not in lieu of any other remedies, legal or equitable, available to enforce this Agreement. ARTICLE C. INTELLECTUAL PROPERTY MA TIERS AND AGREEMEI'.T NOT TO COMPETE 20. Employee's Acknowledgments. The Employee recognizes and acknowledges that: (3) in the course of the Employee's employment by the Company. it will be necessary for the Employee to acquire information which could include, in whole or in part, information concerning the Company's sales, sales volume. s3les methods, sales proposals, customers and .6. prospective customers, identity of customers and prospective ,customers, identity of key purchasing personnel in the employ of customers and prospective customers, amount or kind of customer's purchases from the Company, the Company's sources of supply, the Company's computer programs, computer spreadsheets, system documentation, special hardware, prodUct hardware, related software development, the Company's manuals, formulae, processes, methods, machines, compositions, ideas, improvements, inventions or other confidential or proprietary information belonging to the Company or relating to the Companis affairs (collectively referred to herein as the "Confidential Information"); (b) the Confidential Informatiort is the property;of the Company: (c) the use, misappropriation or disclosure of the Confidential Information would 'constitute a breach of trust and could cause irrepar::ble injury to the Company; and (d) it is essential to the protection of the Company's good will and to the maintenance of the Company's competitive position that the Confidential Information be kept secret and that the Employee not disclose the Confidential Information to others or use the Confidential Information to the Employee's own advantage or the advantage of others. The Employee further recognizes and acknowledges that it is essential for the proper protection of the business of the Company that the Employee be restrained (a) from soliciting or' inducing any employee of the Company to leave the employ of the Company, (b) from hiring or attempting to hire any employee of the Company, (c) from soliciting t!le trade of or trading with the customers and suppliers of the Company for any business purpose, 'and (d) from competing against the Company for a reasonable period following the termination of the Employee's employment with the Company: The Employee further recognizes and understands that his duties at the Company may 'include the preparation of materials, including written or graphic materials, and that any such materials conceived or written by him shall be done as "work made for hire" as defined and used in the Copyright Act of 1976, 17 V.S.C. 9 I '~S-e.Q. In the event of publication of such materials, the Employee understands that since the work is a "work made for hire", the Company will, ' solely retain and own all rights in said materials, including right of copyright, and that the Company may, at its discretion, on a case-by-case basis, grant the Employee by~line credit on such materials as the Company may deem appropriate. 21. Non-Disclosure ofConfid..wtial Informa.ilim, The Employee agrees to hold and safeguard the Confidential Information in trust for the Company, its successors and assigns and agrees that he shall not, without the prior written consent of the Company, misappropriat~ or disclose or make available to anyone for use outside the Company's organization at any time, either during his employment with the Company or subsequent to the termination of his employment with the Company for any reason, including, without limitation, termination by the Company for cause or without cause, any of the Confidential Information, whether or not developed by the Employee, except as required in the performance of the Employee's duties to the Company. 22. Disclosure of Works :lnd Inventions/Assignment ofP:ltcnls. The Employee shall disclose promptly 10 the Company or its nominee any and all works, inventions, discoveries and improvements authorized. conceived or made by the Employee during his employment and " -{- related to the business or activities of the Company, and hereby assigns and agrees to assign all his interest therein to the Company or its nominee. Whenever requested to do so by the Company, the Employee shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain Letters, Patents, or Copyrights of the United States or any foreign country or to otherwise protect the Company's interest therein; Such obligations shall continue beyond the termination of employment with respect to works, inventions, discoveries and improvements authored, conceived or made by the Employee during his employment, and shall be binding upon the Employee's assigns, executors, administrators and other legal representatives. . ' 23. Return IlfMatcriaL1. Upon the termination of the Employee's employment with, the Company for any reason, including .....ithout limitation tennination by the Company for cause or without cause, the Employee shall promptly deliver to the Company all correspondence, drawings, blueprints, manuals, letters, notes, notebooks,reports, flow-charts, programs, proposals and any documents cOl)cerning the Company's customers or concerning products or processes used by the Company and, without limiting the foregoing, will promptly deli ver to the Company any and all other docwnents or materials containing or constituting Confidential Information. 24. Restrictions on Competition. The Employee covenants and agrees that during the period of the Employee's employment hereunder and for a period of one (I) year fOllowing the termination of the Employee's employment, including, without limitation, termination by the Company for cause or without cause, the Employee shall not, in the United States of America, engage, directly or indirectly, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, in any Competing Business. For purposes of this Agreement, the term "Competing Business" shall mean any person. corp,oration or other entity engaged in the , , business of selling or attempting to sell any product or service which is the same as or similar to products or services sold by the Company, within the .last two (2) years prior to tennination of the Employee's employment hereunder. 25. Non-Solicitatilln of Customers and Suppliers. The Employee agrees that during his employment wilh the Company he shall not, directly or indirectly, solicit the trade of, or trade with. any customer, prospective customer, supplier, or prospective supplier of the Company for any business purpose other than for the benefit of the Company, The Empt9yee further agrees that for one (I) year following the termination of his employment with the Company, including, without limitation, termination by the Company for cause or without cause, the Employee shall not, directly or ind[rectly, solicit the trade of, or trade .....ith. any customers or suppliers, or I1rospective customers or suppliers, of the Company. 26. Non-Solidtuti!!n of Empl\lll,tS. The Employee :lgrees that, during his employment with the Company and for one (I) year following the termination of the Employee's employment ....ith the Company, including, \\ithout limitation, terminati~n by the Company for cause or without cause. the Employee shall nOl, directly or indirectly, solicit or induce, or attempt .8. to solicit or induce, any employee of the Company to leave the Company for any reason whatsoever,or hire any employee oftheComplll)Y. 27. Work Made for Hire. The Employee agrees that in the event of publication by the Employee of written or graphic materials during his employment with the Company, the Company will retain and own all rights in said materials, including right of copyright. 28. ConfidentialilY of the Terms of this Agreement. The Employee covenants and agrees that he shall keep confidential and shall not disclose to anyone, including, wi thout limitation, other employees of the Company, the existence of, as well as all material tenns and " conditions of, this Agreement, including, without limitation, the number of Shares that may be exercised under the Option sr:0ted to the Employee. , 29. No Prior Agreements. The Employee represents and warrants that he is not a party to or otherwise subject to or bound by the terms of any contract, agreement or understanding which in any manner would limit or otherwise affect his ability to perfonn his obligations hereunder, including, without limitation, any contract, agreement or understanding containing tenns and provisions similar in any manner to those contained in this Article C. The Employee further represents and warrants that his employment with the Company will not require him to disclose or use any confidential information belonging to prior employers or other persons or entities. 30. Employee's Abilities. The Employee represents that his experience and capabilities are such that the provisions of this Article C. will not prevent him from earning his livelihood, and acknowledges that it would cause the Company serious and irreparable injury and cost if the Employee were to use his ability and knowledge in competition with the Company or to otherwise breach the obligations contained in this ArticleC. 31. Remedies. In the event ofa breach by the Employee of the terms of this Agreement, the Company shall be entitled, if it shall so elect, to institute legal proceedings to obtain damages for any such breach, or to enforce the specific performance of this Agreement by the Employee and to enjoin the Employee from any further violation of this Agreement and to exercise such remedies cumulatively or in conjunction with all other rights and remedies provided by law. The parties acknowledge and agree that, in the event of a breach by th.: 'Employee of the terms of this Agreement, the extent of the Company's damages would b,e extremely difficult to ascertain. To avoid this problem, the parties agree that in the event of a breach by the Employee, the Employee shall, at the Company's discretion, forfeit all rights to the Option granted to the Employee under Article A. above, including, ....ithout limitation, all rights to Shares previously purchased under the Option as well as all future rights to purchase Shares. The parties agree that forfeiture of the Employee's Option as aforesaid shall be in addition to any other relief to which the Company might othemise be entitled to under the terms of this Agreement. Specifically, the Employee acknowledges that the remedies at law for any breach by him of the provisions of this Agreement (including the forfeiture of his Options) may be inadequate and that the Company shall be entitled to injunctive relief against him in the event of any breach. ..9.. 32. Authorization to Modify Restrictions. It is the intention of the parties that the provisions of Article C. hereof shall be enforceable to the fullest extent permissible under applicable law, but that the unenforceability {or modification to conform to such law)ofany provision or provisions hereof shall not render unenforceable, or impair, the remainder thereof. If any provision or provisions hereof shall be deemed invalid or unenforceable, either in whole or , in part, this Agreement shall be deemed amended to delete or modify, as necessary, the offending provision or provisions and to alter the bounds thereof in order to render it valid and enforceable. 33. Tol1in~ Period. The non-competition, nondisclosure and non-solicitation obligations contained in Article C. hereof shall be extended by the length oftime during which the Elnployee shall have been in breach of any of the provisions of such Article C. 34. }<:mplQyer Violation Not a Defense. In an action by the Company to enforce this Agreement, any claims asserted by the Employee against the Company shall not constitute a defense to the Company's action. ARTICLE D. RELEASE 35. EmplQyee Release. In consideration of the grant of the Option to the Employee as set forth in Article A. above, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Employee, the Employee hereby remises, . releases and forever discharges the Company, its officers, directors and shareholders, and their respective heirs, personal representatives, successors and assigns (collectively, the "Released Parties") of and from any and all actions, suits, proceedings, debts, damage, costs, claims, demands, causes of action and/or liabilities of any nature or description whatsoever in law of equity which he may have ormay ever have had from the beginning of time to the present, "_'lO\lm or unknown, re:ll or imaginary. actual or potential, by reason of any actions of any kind taken by any cfthe Released Parties with respect to the Employee's ability to acquire to receive (in any manner whatsoever) an equity interest in the Company, except for the Company's obligation to fulfill the terms and provisions of Article A. above. ARTICLE E. S CORPORATION PROVISIONS 36. Election. Each Employee acknowledges that the Company has entered int\) this Agreement v.ith the understanding and expectation that the Company will be taxed as an "S corporation" under (i) the tax laws of the United States; and (ii) the tax laws of the Commonwealth ofPennsylvanill. The Employee shall take all necessary and appropriate steps and shall execute all necessary and appropriate consents and other documents required to continue the Company's election to be taxed as an S corporation effective under the laws of the United States and the Commonwealth of Pennsylvania. The Employee shall not take any action which would preclude the Company from qualifying as an S corporation under the laws of the United States or the Commonwealth of Pennsylvania. -10. . 37. Power of Attorney. The Employee hereby irrevocably constitutes and appoints the President of the Company, or any successor, with power' of substitution, his true and lawful attorney-in-fact and agent, to execute, acknowledge, verify, swear to, deliver, record and file, in the Employee's name, place and stead, all consents, instruments, documents and certificates that may from time to time,be required by the laws of the United States or the Commonwealth of Pennsylvania, to continue the valid existence of the Company as an S corporation (or similar status). This power-of-attorney is a durable power and shall not be terminated upon the incapacity, disability or incompetence of the Employee and shall not be revoked and shall survive the assignment or transfer by the Employee ofall or part of his Shares. The existence of this power shall not preclude execution of any such instrument by the Employee in his individual capacity on any such matter. ' , ARTICLE F. MISCELLANEOUS 38. ' Entire Aweement. This Agreement represents the entire agreement of the parties and may be amended only by a ....Titing signed by each of them. 39. Governinf I.aw. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. 40. Consent to Jurisdiction. The Employee hereby irrevocable submits to the personal jurisdiction !lfthe United States District Court for the Middle District of Pennsylvania or the Courts of Common Pleas of Dauphin or Cumberland County, Pennsylvania in any action or proceeding arising out of or relating to this Agreement, and the Employee hereby irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in either such court. 41. Service of Process. The Employee hereby irrevocably consents to the service of any summons and complaint and any other process which may be served in any action or proceeding arising out of or related to this Agreement brought in the United States District Court for the Middle Di,strict of Pennsylvania or the Courts of Common Pleas of Dauphin or Cumberland COWlty by the maiHng by certified or registered mail of copies of such process to the Employee at his address as set forth on the signature page hereof. 42. Venue. The Employee hereby irrevocably waives any objection which he no~v or hereafter may have to the laying of venue of any action or proceeding arising out of or relating to this Agreement brought in the United States District Court for the Middle District of Pennsylvania or the Courts of Common Plea.~ of Dauphin or Cumberland COWlty, Pennsylvania and any objection on the groWld that any such action or proceeding in either of such Courts has been brought in any inconvenient forum. Nothing in this Section 42 shall affect the right of the Company to bring any action or proceeding against the Employee or his property in the courts of other jurisdictions. -11- . 43. Aueement Bindin!:. The obligations of the J::mployee under this Agreement shall continue after the termination of his employment with the Company for any reason,with or without cause, and shall be binding on his heirs, executors, legal representative and assigns and shall inure to the benefit of any successors and assigns of the Company. 44. Counterpart~. Section Headings. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. The section headings of this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any of the provisions hereof. 45. References to Gender. Although, for the sake of convenience, all references in this Agreement to the gender of the Employee are to the masculine gender, the parties acknowledge and agree that all such references shall include the feminine gender. THE EMPLOYEE ACKNOwLEDGES AND AGREES THAT THE EXERCISABILITY , OF OPTIONS PURSUANT TO ARTICLE A. HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARESHEREUNDE~.THEEMPLOYEEFURTHERACKNOWLEDGESAND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S PERFORMANCE INCENTIVE STOCK PLAN WInCH IS INCORPORATED HE,REIN .' .BY REFERENCE, SHALL CONFER UPON THE EMPLOYEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE. The Employee acknowledges receipt ofa copy of the Plan and certain information related thereto and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. The Employee has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice. of counsel prior to executing this Agreement and fully understands all provisions of the Agreement, which provisions the Employee a,cknowledges and agrees 8re reasonable and enforceable to protect the Company's interests. The Employee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan. The Employee further agrees to notify the Company upon any change in the residence address indicated below. -12- ,.' , 1 "j 1 I 1 , I ! ,~ I " , ; . \ j "j 'I i r~-<~~ .'" I ' ~. ~"'.- ,__.L--' /,__,,,~_~/ 1",/ ~,.."' '~_ -", -------- ,'...-------- / ...-/. \ -:c:.-;;:~~:..~-,,_/ ,~, ...../' -~"~',' ,"~ , ".,../,'/ ~' /' .J 1.,1- IJ,JLVtv.. l~,,-\ 'If . /1 "-;'~'-I'-"'" U ' fl~1.~, tJ'f':(,,; . , . ~'iI'c . . ' .'...,." ...:'~-:~~~,~',~,:';"..'::. '.,','.:'..:':':.~~,:.':"",....t",:,,.:':~:":,:"."'.'.".,:',:' "'",'~.,/: "",'~ . --~'-..-- COUNT II !NTELLlMARK VS. DOUG WARDROPE 26. The answers to the allegations of paragraphs 1 through 25 are realleged and incorporated herein by reference. 27. The averment calls for a conclusion of law and not an allegation of material facts; and accordingly, no responsive pleading is required, 28. The averment calls for a conclusion of law and not an allegation of material facts; and accordingly, no responsive pleading is required. 29. Defendants are without knowledge or information sufficient 'to form a belief as to the truth or falsity of this averment. 30. Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity,of this averment. 31, Admitted in part, denied in part. Answering defendants admit that their employee, Timothy Copenhaver has worked on projects with the Pennsylvania Department of Public Welfare while under their employ. The balance of the averment is denied as the defendants are without knowledge or information sufficient to form a belief for the truth or falsity of same. 32. Denied. To the contrary, Defendant, Wardrope has no information concerning any contracts between IntelliMark and the Pennsylvania Department of Public Welfare. 33, Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity of this averment. 34. 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