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Dell Poaches IBM's Top M&A Exec: Page 2 of 2

Indeed, the stakes are such that IBM has wasted no time in suing Johnson in an effort to block his departure. The company admits his loss would be a significant blow. "The actual and potential corporate transactions as to which Mr. Johnson has knowledge span the entire range of IBM businesses and product lines," IBM stated in court paper filed last week in U.S. District Court for Southern New York.

"Among the highly sensitive information Mr. Johnson possesses is, for example, information regarding where and in what companies and technologies IBM will invest, at what times, at what rates of return, as well as information regarding potential divestitures," IBM said.

IBM further states that the corporate information to which Johnson is privy is so sensitive that it's disclosed internally only on a strict "need to know" basis.

IBM contends that Johnson signed a binding noncompete clause in 2005 and thus should be disallowed from joining Dell. Dell competes with IBM mainly in the server market. IBM is asking the court to bar Johnson from moving to Dell and is also suing the executive for legal costs.

An IBM spokesman said the company plans to aggressively pursue the case. "Mr. Johnson repeatedly received significant compensation in exchange for agreeing to non-compete provisions, and IBM expects him to fulfill his obligations. IBM intends to enforce those obligations to the full extent permitted by law," the spokesman said.

The suit marks the third time in recent weeks that IBM has turned to the courts in an effort to block an executive from jumping to a rival.

The company earlier this month filed fraud and breach-of-contract charges against a former executive who cashed in hundreds of thousands of dollars in stock options and other benefits before leaving to join Unisys. Sam Khanna, currently general manager for Unisys' North American IT services unit, violated an agreement to repay benefits if he moved to a competing company within 12 months of exercising those benefits, IBM claimed.

Khanna held a number of high-level posts at IBM from 1996 until May 2008, when he joined Unisys. IBM is suing him for more than $500,000. It's asking the court to order Khanna to repay the benefits and also pay punitive damages and legal costs.

In November, IBM filed similar claims against Mark Papermaster, now head of device hardware engineering at Apple. Microchip expert Papermaster in January settled a noncompete lawsuit filed against him by IBM and in April joined Steve Jobs' company.

Under the settlement, Papermaster must check in with IBM if he suspects that any innovations he develops at Apple infringe on confidential or proprietary information he picked up during his years of work at Big Blue.

Officials at Dell were not immediately available for comment.


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