Exhibit 10.3

 

NONCOMPETITION AGREEMENT

 

In recognition of the critical role that you will play as a senior executive
with International Business Machines Corporation (“IBM”) and in recognition of
your access to IBM Confidential Information by virtue of this position, and
further as consideration for your being hired as a senior executive, any awards
to be granted to you under an International Business Machines Corporation
Long-Term Performance Plan (“LTPP”), and/or for other good and valuable
consideration, you (“Employee” or “you”) agree to the terms and conditions of
this Noncompetition Agreement (this “Agreement”) as follows:

 

1.                                      Covenants.

 

(a)  You acknowledge and agree that the compensation that you will receive in
connection with this Agreement, including any equity awards, cash and other
compensation, is consideration both for your work at IBM and for your compliance
with the post-employment restrictive covenants included in this Paragraph 1 of
this Agreement.

 

(b)  You further acknowledge and agree that: (i) the business in which IBM and
its affiliates (collectively, the “Company”) are engaged is intensely
competitive and that your employment by IBM requires that you have access to,
and knowledge of, IBM Confidential Information, including IBM Confidential
Information that pertains not only to your business or unit, but also to the
Company’s global operations; (ii) you are given access to, and develop
relationships with, customers of the Company at the time and expense of the
Company; and (iii) by your training, experience and expertise, your services to
the Company are, and will continue to be, extraordinary, special and unique.

 

(c)  You acknowledge and agree that: (i) the disclosure of IBM Confidential
Information would place the Company at a serious competitive disadvantage and
would do serious damage, financial and otherwise, to the business of the
Company; and (ii) you will keep in strict confidence, and will not, directly or
indirectly, at any time during or after your employment with IBM,

 

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disclose, furnish, disseminate, make available or use, except in the course of
performing your duties of employment, any IBM Confidential Information or any
other trade secrets or confidential business and technical information of the
Company’s customers or vendors, without limitation as to when or how you may
have acquired such information.

 

(d) You further acknowledge and agree (i) that IBM Confidential Information,
whether reduced to writing, maintained on any form of electronic media, or
maintained in your mind or memory and whether compiled by the Company and/or
you, is owned by the Company, derives independent economic value from not being
generally known to or readily ascertainable through proper means by others who
can obtain economic value from its disclosure or use, and is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy of
such information; (ii) that IBM Confidential Information therefore constitutes a
trade secret of the Company; and (iii)  that any retention and use of such
information by you during or after your employment with IBM (except in the
course of performing your duties and obligations to IBM) shall constitute a
misappropriation of the Company’s trade secrets.

 

(e)  You acknowledge and agree that during your employment with IBM and for
twelve (12) months following the termination of your employment either by you
for any reason, by IBM for Cause, or by IBM without Cause where IBM elects to
offer you severance payments in accordance with Paragraph 4 below, that:

 

(i) you will not directly or indirectly within the “Restricted Area” “Engage in
or Associate with” (a) any “Business Enterprise” or (b) any competitor of the
Company, if performing the duties and responsibilities of such engagement or
association could result in you intentionally or unintentionally using,
disclosing, or relying upon IBM Confidential Information to which you had access
by virtue of your job duties or other responsibilities with IBM; and

 

(ii) you will not directly or indirectly solicit, for competitive business
purposes, any customer of the Company with which you

 

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were directly or indirectly involved as part of your job responsibilities during
the last twelve (12) months of your employment with IBM.

 

(f) Notwithstanding Paragraph 14 below, in the event that California law is
deemed by a court of competent jurisdiction to govern this Agreement with
respect to any Employee, the covenants contained in Paragraphs 1(e)(i) and
1(e)(ii) will apply only to competition or solicitation that involves the use or
disclosure of the Company’s trade secrets, which you acknowledge is IBM
Confidential Information.

 

(g) You further acknowledge and agree that during your employment with IBM and
for two (2) years following the termination of your employment by either you or
by IBM for any reason, you will not directly or indirectly within the
“Restricted Area” hire, solicit or make an offer to, or attempt to or
participate or assist in any effort to hire, solicit, or make an offer to, any
employee of the Company to be employed or to perform services outside of the
Company.  For purposes of this subsection 1(g), “employee of the Company”
includes any employee of the Company who worked within the Restricted Area at
any time in the 12-month period immediately preceding any actual or attempted
hiring, solicitation or making of an offer.

 

2.                                      Definitions.

 

(a)  For purposes of this Agreement, “Business Enterprise” shall mean any entity
that engages in, or owns or controls an interest in any entity that engages in,
competition with any business unit or division of the Company in which you
worked at any time during the three (3) year period prior to the termination of
your employment.

 

(b)  For purposes of this Agreement, a “California Employee” shall mean an
Employee who works and resides in the state of California as of the date of
execution of this Agreement and/or the date of enforcement of a provision in
this Agreement.

 

(c)   For purposes of this Agreement, “Cause” shall mean, as reasonably
determined by IBM, the occurrence of any of the following: (i)

 

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embezzlement, misappropriation of corporate funds or other material acts of
dishonesty; (ii) commission or conviction of any felony or of any misdemeanor
involving moral turpitude, or entry of a plea of guilty or nolo contendere to
any felony or misdemeanor (other than a minor traffic violation or other minor
infraction); (iii) engagement in any activity that you know or should know could
harm the business or reputation of the Company; (iv) failure to adhere to the
Company’s corporate codes, policies or procedures; (v) a breach of any covenant
in any employment agreement or any intellectual property agreement, or a breach
of any other provision of your employment agreement, in either case if the
breach is not cured to the Company’s satisfaction within a reasonable period
after you are provided with notice of the breach (no notice and cure period is
required if the breach cannot be cured), provided, however, that the mere
failure to achieve performance objectives shall not constitute Cause;
(vi) failure by you to perform your duties or follow management direction, which
failure is not cured to the Company’s satisfaction within a reasonable period of
time after a written demand for substantial performance is delivered to you (no
notice or cure period is required if the failure to perform cannot be cured); or
(vii) violation of any statutory, contractual or common law duty or obligation
to the Company, including, without limitation, the duty of loyalty.

 

(d)  For purposes of this Agreement, “Engage in or Associate with” shall
include, without limitation, engagement or association as a sole proprietor,
owner, employer, director, partner, principal, joint venture, associate,
employee, member, consultant, or contractor.  The phrase also shall include
engagement or association as a shareholder or investor during the course of your
employment with IBM, and shall include beneficial ownership of 5% or more of any
class of outstanding stock of a Business Enterprise or competitor of the Company
following the termination of your employment with IBM.

 

(e)  For purposes of this Agreement, “IBM Confidential Information” shall
include, without limitation, the Company’s formulae, patterns, compilations,
programs, devices, methods, techniques, software, tools, systems, and processes,
the Company’s selling, manufacturing, servicing methods and

 

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business techniques, implementation strategies, and information about any of the
foregoing, the Company’s training, service, and business manuals, promotional
materials, training courses and other training and instructional materials,
vendor and product information, customer and prospective customer lists, other
customer and prospective customer information, client data, global strategic
plans, marketing plans, information about the Company’s management techniques
and management strategies, information regarding long-term business
opportunities, information regarding the development status of specific Company
products, assessments of the global competitive landscape of the industries in
which the Company competes, plans for acquisition or disposition of products or
companies or business units, expansion plans, financial status and plans,
compensation information, and personnel information.

 

(f)  For purposes of this Agreement, “Restricted Area” shall mean any geographic
area in the world in which you worked or for which you had job responsibilities,
including supervisory responsibilities, during the last twelve (12) months of
your employment with IBM.

 

3.                                      Acknowledgements.

 

You acknowledge that a mere agreement not to disclose, use, or rely on IBM
Confidential Information after your employment by IBM ends would be inadequate,
standing alone, to protect IBM’s legitimate business interests.  You further
acknowledge that disclosure of, use of, or reliance on IBM Confidential
Information, whether or not intentional, is often difficult or impossible for
the Company to detect until it is too late to obtain any effective remedy.  You
further acknowledge that the Company would suffer irreparable harm if you fail
to comply with Paragraph 1 or otherwise improperly disclose, use, or rely on IBM
Confidential Information.  You acknowledge that the restrictions set forth in
Paragraph 1 are reasonable as to geography, scope and duration.

 

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4.                                      Termination without Cause.

 

In the event that IBM terminates your employment without Cause, IBM may elect in
its sole discretion to offer to you severance payments (in an amount and on
terms that IBM will determine, and disclose to you, prior to your termination of
employment) in accordance with IBM’s regular payroll practices and subject to
all applicable foreign, federal, state and local withholdings or other taxes
that IBM may from time to time be required to withhold.  In the event you agree
to such payments and without limiting the generality of the foregoing, IBM may
cease making such payments under this Paragraph 4 if IBM believes that you are
in breach of any of your obligations in this Agreement.  Without prejudice to
any other remedies under this Agreement or under applicable law, IBM may also
recoup any payments made to you under this Paragraph 4 if you breach any of your
obligations under this Agreement.

 

5.                                      Injunctive Relief.

 

You agree that the Company would suffer irreparable harm if you were to breach,
or threaten to breach, any provision of this Agreement and that the Company
would by reason of such breach, or threatened breach, be entitled to injunctive
relief in a court of appropriate jurisdiction, without the need to post any
bond, and you further consent and stipulate to the entry of such injunctive
relief in such a court prohibiting you from breaching this Agreement.  This
Paragraph 5 shall not, however, diminish the right of the Company to claim and
recover damages in addition to injunctive relief.

 

6.                                      Severability.

 

In the event that any one or more of the provisions of this Agreement shall be
held to be invalid or unenforceable, the validity and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. 
Moreover, if any one or more of the provisions contained in this Agreement shall
be held to be excessively broad as to duration, activity or subject, such
provisions shall be construed by limiting and reducing them so as to

 

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be enforceable to the maximum extent allowed by applicable law.  Furthermore, a
determination in any jurisdiction that this Agreement, in whole or in part, is
invalid or unenforceable shall not in any way affect or impair the validity or
enforceability of this Agreement in any other jurisdiction.

 

7.                                      Captions.

 

The captions in this Agreement are inserted for convenience and reference only
and shall in no way affect, define, limit or describe the scope, intent or
construction of any provision hereof.

 

8.                                      Waiver.

 

The failure of IBM to enforce any terms, provisions or covenants of this
Agreement shall not be construed as a waiver of the same or of the right of IBM
to enforce the same.  Waiver by IBM of any breach or default by you (or by any
other employee or former employee of IBM) of any term or provision of this
Agreement (or any similar agreement between IBM and you or any other employee or
former employee of IBM) shall not operate as a waiver of any other breach or
default.

 

9.                                      Successors and Assigns.

 

This Agreement shall inure to the benefit of and be binding upon IBM, any
successor organization which shall succeed to IBM by acquisition, merger,
consolidation or operation of law, or by acquisition of assets of IBM and any
assigns.  You may not assign your obligations under this Agreement.

 

10.                               Disclosure of Existence of Covenants.

 

You agree that while employed by IBM and for two (2) years thereafter, you will
communicate the contents of this Agreement to any person, firm, association,
partnership, corporation or other entity which you intend to be employed by,
associated with or represent, prior to or at the time of accepting such
employment, association or representation.

 

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11.                               Notice to IBM of Prospective Position.

 

You agree that if, at any time during your employment or within twelve (12)
months following the termination of your employment with IBM, you are offered
and intend to accept a position with any person, firm, association, partnership,
corporation or other entity other than the Company, you will provide the Senior
Vice President of Human Resources for IBM Corporation with two weeks’ written
notice prior to accepting any such position.  This two weeks’ written notice is
separate from any other notice obligations you may have under agreements with
IBM.  If for any reason you cannot, despite using your best efforts, provide the
two weeks’ notice prior to accepting any such position, you agree that you will
provide two weeks’ notice prior to commencing that new position.  You
acknowledge and agree that a two-week notice period is appropriate and necessary
to permit IBM to determine whether, in its view, your proposed new position
could lead to a violation of this Agreement, and you agree that you will provide
IBM with such information as IBM may request to allow IBM to complete its
assessment (except that you need not provide any information that would
constitute confidential or trade secret information of any entity other than the
Company).  During the notice period required by this Section, IBM may choose, in
its sole discretion, to limit your duties in your position with IBM and to
restrict your access to IBM’s premises, systems, products, information, and
employees.  IBM is committed to protect its trade secrets and other confidential
and proprietary information, and will take all necessary and appropriate steps
to do so.  Upon giving notice, you agree to cooperate with IBM in good faith to
insure that its trade secrets and other confidential and proprietary information
are not disclosed, either intentionally or inadvertently.

 

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12.                               No Oral Modification.

 

This Agreement may not be changed orally, but may be changed only in a writing
signed by the Employee and a duly authorized representative of IBM.

 

13.                               Entire Agreement.

 

Although this Agreement sets forth the entire understanding between the Employee
and IBM concerning the restrictive covenants herein, this Agreement does not
impair, diminish, restrict or waive any other restrictive covenant,
nondisclosure obligation or confidentiality obligation of the Employee to the
Company under any other agreement, policy, plan or program of the Company. 
Nothing herein affects your rights, immunities, or obligations under any
federal, state, or local law, including under the Defend Trade Secrets Act of
2016, as described in Company policies, or prohibits you from reporting possible
violations of law or regulation to a government agency, as protected by law. The
Employee and IBM represent that, in executing this Agreement, the Employee and
IBM have not relied upon any representations or statements made, other than
those set forth herein, with regard to the subject matter, basis or effect of
this Agreement.

 

14.                               Governing Law and Choice of Forum.

 

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York, without regard to its conflict of law rules, except
with respect to application of this Agreement to California Employees, for whom
the choice of law rules in Section 6 of the Restatement (Second) of Conflict of
Laws shall apply.  The parties agree that any action or proceeding with respect
to this Agreement shall be brought exclusively in the state and federal courts
sitting in New York County or Westchester County, New York.  The parties agree
to the personal jurisdiction thereof, and irrevocably waive any objection to the
venue of such action, including any objection that the action has been brought
in an inconvenient forum.

 

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Employee Name (Print)

 

 

 

 

 

(Employee Signature)

 

 

 

 

 

Employee Serial Number

 

 

 

 

 

Date

 

 

 

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

 

 

 

 

 

By:

 

 

Diane J. Gherson

 

Senior Vice President - Human Resources

 

 

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