AMENDED AND RESTATED SENIOR EXECUTIVE AGREEMENT
AMENDED AND RESTATED
SENIOR
EXECUTIVE AGREEMENT
THIS
AMENDED AND RESTATED AGREEMENT by and between ON ASSIGNMENT, INC., a Delaware
corporation (the
“Company”) and XXXXXX XXXXXXX (“Executive”) is entered into
on December 11, 2008.
Recitals
A. The
Company and Executive previously entered into an agreement, dated July 23, 2004,
as renewed and amended on October 16, 2006 and as further amended on November
29, 2007, pursuant to which Executive is employed as the President of Lab
Support and Allied Divisions of the Company (the “Prior Agreement”).
B. The
Company and Executive wish to amend and restate the Prior Agreement to implement
changes required under Internal Revenue Code (“Code”) Section 409A (together
with the regulations and official interpretations thereof, “Section 409A”).
C.
Certain definitions are set forth in Section 4 of this
Agreement.
Agreement
The
parties hereto agree as follows:
1.
Employment.
The Company engaged Executive as of August 30, 2004 (the “Start Date”) to serve the
Company, during the Service Term in the capacities, and subject to the terms and
conditions, set forth in this Agreement.
(a)
Services.
During the Service Term, Executive, as President of the Company’s Lab Support
Division and Allied Division, shall be responsible for the day-to-day operations
of the Company’s Lab Support line of business and Allied healthcare line of
business and all other duties and responsibilities as may be reasonably assigned
to him from time to time by the Company’s Chief Executive Officer (the “CEO”). Executive will
report directly to the CEO. Executive will devote his best efforts and
substantially all of his business time and attention (except for vacation
periods and periods of illness or other incapacity) to the business of the
Company and its Affiliates. Notwithstanding the foregoing, and provided
that such activities do not interfere with the fulfillment of Executive’s
obligations hereunder, Executive may (A) serve as an officer, director or
trustee of any charitable or non-profit entity; (B) own a passive
investment in any private company that is not a competitor of the Company and
own up to 2% of the outstanding voting securities of any public company; and/or
(C) subject to the Company’s reasonable approval, serve as a director of a
for-profit company,
provided that Executive reasonably believes that such service
would be in the interests of the Company. Executive’s place of employment
shall be one of the Company’s offices in or around Santa Clara, California; provided, however, that Executive shall spend
a minimum of five (5) days per month in the Company’s headquarters in Calabasas,
California and shall travel to such other locations of the Company and its
Affiliates as may be reasonably necessary in order to discharge his duties
hereunder. Executive shall not be required to re-locate his place of
employment to the Company’s headquarters; however, in the event that the CEO and
Executive mutually determine that it would be in the interests of the Company
for Executive to re-locate his place of employment to the Company’s
headquarters, Executive shall be entitled to reimbursement and/or compensation
for certain costs and expenses incurred in connection with such relocation, as
negotiated by Executive and the Company.
(b) Salary, Bonus and
Benefits.
(i) Salary
and Bonus.
During the Service Term, the Company will pay Executive a base salary (the
“Annual Base Salary”) as the Board (or Compensation Committee thereof) may
designate from time to time, at the rate of not less than $200,000 per annum;
provided, however, that
the Annual Base Salary for fiscal year 2008 shall be $310,000 and shall be
subject to review annually (at the end of each fiscal year of the Company) by
the Board (or Compensation Committee thereof) for upward increases
thereto. Commencing with fiscal year 2009, Executive shall be
eligible to receive an annual bonus in an amount of up to 100% of Executive’s
Annual Base Salary for such fiscal year, as determined by the Compensation
Committee of the Board based upon the following: at the beginning of
each fiscal year of the Company that commences during the Service Term, the CEO
and Executive shall cooperate with each other in good faith to determine plan
targets (the “Financial Targets”), which shall be a combination of targets for
revenue, gross profit and operating margin of the Company’s Lab Support Division
and Allied Division operations. The Financial Targets shall be
subject to approval by the Compensation Committee of the
Board. Executive shall be entitled to a bonus of up to 50% of the
Annual Base Salary if the Financial Targets, as approved by the Compensation
Committee, are met. Executive shall be eligible for an additional
bonus of up to 50% of the Annual Base Salary (thereby making the total bonus
opportunity 100% of the Annual Base Salary), upon over-achievement of Financial
Targets and/or accomplishment of key operating objectives determined by the CEO,
each as approved by the Compensation Committee.
With
respect to fiscal year 2008 only, Executive shall be eligible to earn an annual
bonus of up to $278,250 for performance relating to the Lab Support Division, as
determined by the Compensation Committee of the Board based upon the
following: at the beginning of fiscal year 2008, the CEO and
Executive shall cooperate with each other in good faith to determine plan
targets (the “Financial Targets”), which shall be a combination of targets for
revenue, gross profit and operating margin of the Company’s Lab Support Division
operations. The Financial Targets shall be subject to approval by the
Compensation Committee of the Board. Executive shall be entitled to a
bonus of up to 50% of $278,250 (i.e. $139,125) if the Financial Targets, as
approved by the Compensation Committee, are met. Executive shall be
eligible for an additional bonus of up to 50% of $278,250 (thereby making the
total bonus opportunity 100% of $278,250), upon over-achievement of the Lab
Support Division Financial Targets and/or accomplishment of key operating
objectives determined by the CEO, each as approved by the Compensation
Committee. With respect to fiscal year 2008 only, Executive shall be
entitled to a guaranteed bonus of $15,000 and shall be eligible to earn an
additional annual bonus of up to $35,000 for performance relating to the Allied
Division, as determined by the Compensation Committee of the Board based upon
the following: at the beginning of fiscal year 2008, the CEO and
Executive shall cooperate with each other in good faith to determine plan
targets (the “Financial Targets”), which shall be a combination of targets for
revenue, gross profit and operating margin of the Company’s Allied Division
operations. The Financial Targets shall be subject to approval by the
Compensation Committee of the Board. Executive shall be entitled to a
bonus of up to 50% of $35,000 (i.e. $17,500) if the Financial Targets, as
approved by the Compensation Committee, are met. Executive shall be
eligible for an additional bonus of up to 50% of $35,000 (thereby making the
total bonus opportunity 100% of $35,000), upon over-achievement of the Allied
Division Financial Targets and/or accomplishment of key operating objectives
determined by the CEO, each as approved by the Compensation
Committee.
(ii)
Benefits.
Executive shall be entitled to the benefits set forth in this Section 1(b)(ii)
during the Service Term, but only during the Service Term unless explicitly
provided to the contrary. Executive shall be entitled to participate in
and shall receive all benefits under pension benefit plans provided by the
Company (including without limitation participation in any Company incentive,
savings and retirement plans, practices, policies and programs) to the extent
applicable generally to other peer executives of the Company. In addition,
the Executive and/or the Executive’s family shall be entitled to participate and
shall receive all benefits under welfare plans provided by the Company
(including without limitation medical prescriptions, dental, disability,
employee life, group life, accidental life and travel accident insurance plans)
to the extent and on the same basis applicable generally to other peer
executives of the Company. In the event that Executive is not eligible to
participate in any of the Company’s welfare benefit plans as of the Start Date,
the Company shall reimburse
Executive
for any payments Executive is required to make to his former employer to
continue his participation in each of such employer’s welfare benefit plans,
until such time as Executive is eligible to participate in the analogous welfare
benefit plan of the Company; provided , however , that
Executive shall be entitled to such reimbursement only (a) so long as his
eligibility for the Company’s welfare benefit plans relates to his time of
service with the Company, and (b) upon presentation of reasonably
acceptable documentation and evidence of payment; and provided
further that “analogous” shall relate to the subject matter
covered by such plan (
e.g. , medical or dental) and shall not be construed to require the
provision to Executive of identical or substantially equivalent benefits to
those provided by the former employer’s plans. Executive shall be
reimbursed for customary travel and other expenses, subject to standard and
reasonable documentation requirements. Such travel reimbursement shall
apply to Executive’s travel to and from the Company’s headquarters in Calabasas,
California, for so long as Executive’s primary place of business is outside of
Calabasas, California. In addition, Executive will receive a car allowance
of $450 per month, which allowance may be used in Executive’s discretion toward
lease or financing payments, maintenance and/or other car-related
expenses. Executive shall also be eligible to receive four weeks paid
vacation per annum.
(iii)
Stock
Options.
(A)
On the Start Date, Executive received a non-qualified stock option grant for the
purchase of 75,000 shares of the common stock of the Company (the “Common Stock”). Such
option (i) had an exercise price of the fair market value of the Common
Stock on the date of grant, as determined in accordance with the Company’s
Restated 1987 Stock Option Plan (the “Stock Plan”); (ii) vested over
a four-year period with 25% vesting on the first anniversary of the date of
grant and monthly thereafter at the rate of 1/36
th of the remainder of the grant (subject to accelerated
vesting upon a change of control or permanent disability to the extent permitted
by the Stock Plan); and (iii) expires not later than the tenth anniversary of
the date of grant.
(1) On
January 2, 2008, (the “Grant Date”) Executive received a non-qualified stock
option grant for the purchase of 15,000 shares of the common stock of the
Company (the “Common Stock”). Such option (i) had an
exercise price of the fair market value of the Common Stock on the Grant Date,
(as determined in accordance with the Company’s Stock Plan; (ii) vests in equal,
consecutive, monthly installments over a four-year period, commencing one month
following the Grant Date (subject to accelerated vesting upon a change of
control or permanent disability to the extent permitted by the Stock Plan); and
(iii) expires not later than the tenth anniversary of the Grant
Date.
(2) On
January 2, 2008, (the “Grant Date”) Executive received a grant of
Restricted Stock Units (“RSUs”), each representing the right to receive one
share of Company common stock upon vesting. The dollar value of
the RSU grant was $50,000 (the “RSU Dollar Value”). The number of
RSUs comprising Executive’s award was determined by dividing the RSU Dollar
Value by the fair market value (as that term is defined in the Stock Plan) of a
share of the Company’s common stock on the Grant Date. The
award (i) vests in three equal, consecutive, annual installments, commencing one
year following the Grant Date (subject to accelerated vesting upon a change of
control or permanent disability to the extent permitted by the Stock Plan).
Shares of Company common stock shall be delivered in respect of RSUs
vesting in accordance with this Section 1(b)(iii)(A)(2) on or as soon as
practicable after the vesting date of such RSUs, but in no event more than
fifteen days after such vesting date(s), with the exact payment dates to be
determined by the Company in its sole discretion.
(B)
The other terms and conditions of the foregoing option shall be set in
accordance with the Stock Plan and shall be consistent with the terms contained
in stock option agreements provided to other peer executives of the
Company.
(iv)
Change of
Control; Sale of Division. Executive shall be
entitled to participate in the Company’s existing Change of Control Severance
Plan as well as any successor plan thereto. In the event the Company sells the
U.S. Lab Support Division to a third party, Executive shall be entitled to
a lump-sum payment equal tothe then applicable Annual Base Salary,
which payment shall (A) be
made
within 30 days following the closing of the sale of the Division, and (B) be in
lieu of any other severance or similar payment to which Executive may be
entitled as a result of such sale or Executive’s termination of employment with
the Company in connection therewith, unless such other payment is (or payments
in the aggregate are) greater than the then applicable Annual Base Salary, or
unless Executive otherwise elects in his sole discretion to receive such other
payment(s), in either of which cases Executive shall be entitled to such other
payment(s) but not the lump-sum payment provided by this Section 1(b)(iv).
(c) Termination.
(i)
Events of
Termination. Executive’s employment
with the Company shall cease upon:
(A)
Executive’s death.
(B)
Executive’s voluntary retirement.
(C) Executive’s
“Disability” means
Executive has become disabled within the meaning of Section 409A.
(D) Termination by the
Company by the delivery to Executive of a written notice from the Board or the
CEO that Executive has been terminated (“Notice of Termination”) with
or without Cause. “Cause” shall
mean:
(1)
Executive’s (aa) conviction of a felony; (bb) Executive’s commission of any
other material act or omission involving dishonesty or fraud with respect to the
Company or any of its Affiliates or any of the customers, vendors or suppliers
of the Company or its Subsidiaries; (cc) Executive’s misappropriation of
material funds or assets of the Company for personal use; or (dd) Executive’s
engagement in unlawful harassment or other discrimination with respect to
the employees of the Company or its Subsidiaries;
(2) Executive’s
continued substantial and repeated neglect of his duties, after written notice
thereof from the Board or the CEO and such neglect has not been cured
within 30 days after Executive receives notice thereof;
(3) Executive’s
gross negligence or willful misconduct in the performance of his duties
hereunder that is materially and demonstrably injurious to the Company;
or
(4) Executive’s
engaging in conduct constituting a breach of Sections
2 or 3 hereof
that is not cured in full within 15 days, and is materially and demonstrably
injurious to the Company, after notice of default thereof, from the Company, as
determined by a court of law.
The
delivery by the Company of notice to Executive that it does not intend to renew
this Agreement as provided in Section
1(f) shall constitute a termination by the Company without
Cause if, at the time of such notice, Executive is willing and able to renew the
Agreement and continue providing services on terms and conditions substantially
similar to those contained in this Agreement, provided, that in no event
shall notice which fulfills the requirements of Section
1(c)(i)(D)(1), (2), (3) or (4) above
constitute a termination by the Company without Cause.
(E) Executive’s
voluntary resignation for whatever reason by the delivery to the Company and the
Board of at least 14 days’ prior written notice from Executive (or 90 days in
the case of notice to the Company that Executive does not intend to renew this
Agreement as provided in
Section 1(f)).
(ii)
Date of
Termination. “Date
of Termination” means the date on which Executive experiences a
separation from service within the meaning of Section 409A(a)(2)(A)(i) of the
Internal Revenue Code of 1986, as amended, and Treasury Regulation Section
1.409A-1(h) (a “Separation from Service”).
(iii)
Rights on
Termination.
(A)
In the event that termination is by the Company without Cause (including by
operation of the last paragraph of Section 1(c)(i)(D)
above), the Company will pay Executive (i) an amount equal to 100% of the Annual
Base Salary, payable over a period of twelve (12) months commencing
on the Date of Termination (the “Severance Period”
), in substantially equal installments, on regular salary payment
dates (but no less often than monthly), provided, that payment of the
amounts described in this Section 1(c)(iii)(A) shall not commence until the
Company’s first payroll date occurring on or after the 30th day
following the Date of Termination (the “First Payroll Date”) and any
amounts that would otherwise have been paid prior to the First Payroll Date
shall instead be paid on the First Payroll Date, and (ii) a cash amount equal to the aggregate premiums that the
Company would have paid for basic life insurance, accidental death and
dismemberment insurance and long- and short-term disability insurance, each as
in effect on the Date of Termination, had Executive remained employed by the
Company during the Severance Period (together, “Insurance
Benefits”). In addition, during the Severance Period, subject
to Executive’s proper election to continue healthcare coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will pay
Executive’s COBRA premiums in respect of COBRA benefits to be provided through
third-party insurance maintained by the Company under the Company’s benefit
plans in a manner that causes such COBRA benefits to be exempt from the
application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5),
provided, that if
during the period of continuation coverage, any plan pursuant to which such
benefits are to be provided ceases to be exempt from the application of Section
409A under Treasury Regulation Section 1.409A-1(a)(5), then an amount equal to
each such remaining premium shall thereafter be paid to Executive as currently
taxable compensation in substantially equal monthly installments over the
remainder of the continuation coverage period. The payments of Annual Base
Salary, COBRA benefits and amounts in lieu of Insurance Benefits in accordance
with this Section 1(c)(iii)(A) are
collectively referred to as “Severance
Payments”. In addition, the Company will pay to Executive in a lump sum
any accrued but unused vacation time. This Section 1(c)(iii)(A)
shall not apply unless the Company and Executive have executed a general release
in a form acceptable to the Company. Each payment under Section
1(c)(iii)(A) above shall be treated as a separate payment for the purposes of
Section 409A.
(B)
If the Company terminates Executive’s employment for Cause, or if Executive
resigns for whatever reason (including by the Executive’s non-renewal of the
Service Term under Section 1(f) below),
the Company’s obligations to pay any compensation or benefits under this
Agreement (other than accrued but unused vacation time which shall be paid to
Executive in a lump sum payment) and all vesting under all stock options held by
Executive will cease effective as of the Date of Termination. In such
event, Executive’s rights under stock options vested prior to the Date of
Termination shall not be affected, except to the extent that Executive’s
termination of employment accelerates the termination of such stock
options. Executive’s right to receive any other health or other benefits,
if any, will be determined under the provisions of applicable plans, programs or
other coverages.
(C)
If Executive’s employment terminates because of Executive’s death or Disability,
then Executive or his estate shall be entitled to any disability income or life
insurance payments from any insurance policies (other than any “key man”
life insurance policy) maintained by the Company. In addition, in the
event of such a termination, for a period of six (6) months commencing on the
Date of Termination, Executive or his estate shall be entitled to payment of an
amount equal to 50% of the Annual Base Salary, payable over six months from
Executive’s death or Disability in approximately equal installments on regular
salary payment dates.
Notwithstanding
the foregoing, the Company’s obligation to Executive for Severance Payments
shall cease if Executive is found by a court of law to be in material violation
of the provisions of Sections 2 or
3 hereof.
(d)
Mitigation. The Company’s obligation to
continue to provide Executive with the Severance Payments pursuant
to Section
1(c)(iii)(A) above and the benefits pursuant to the second
sentence of Section
1(c)(iii)(C) above shall cease if Executive becomes employed
as a senior executive by a third party. Executive shall be under no
obligation to seek or accept any employment during the Severance
Period.
(e)
Liquidated
Damages. The
parties acknowledge and agree that damages which may result to Executive for
termination by the Company without Cause would be extremely difficult or
impossible to establish or prove, and agree that the Severance Pay shall
constitute liquidated damages for any breach of this Agreement by the Company
through the Date of Termination. Executive agrees that, except for such
other payments and benefits to which Executive may be entitled as expressly
provided by the terms of this Agreement or any applicable Benefit Plan, such
liquidated damages shall be in lieu of all other claims that Executive may make
by reason of termination of his employment or any such breach of this Agreement
and that, as a condition to receiving the Severance Payments, Executive will
execute a contingent mutual release of claims in a form reasonably satisfactory
to both the Company and Executive.
(f)
Term of
Employment.
Unless Executive’s employment under this Agreement is sooner terminated as a
result of Executive’s termination in accordance with the provisions of Section
1(c) above, Executive’s employment under this Agreement shall
commence on the Start Date and shall terminate on the second anniversary thereof
(the “Service
Term” ); provided,
however, that Executive’s employment under this Agreement, and
the Service Term, shall be automatically renewed for additional one-year periods
commencing on such second anniversary and, thereafter, on each successive
anniversary of such date unless either the Company or Executive notifies the
other party in writing at least ninety (90) days prior to any such anniversary
that it or he desires not to renew Executive’s employment under this
Agreement. All references herein to “Service Term” shall include
any renewals thereof after the second anniversary of the Start
Date.
(g) Potential Six-Month
Delay. Notwithstanding anything to the contrary in this
Agreement, no compensation or benefits, including without limitation
any Severance Payments in connection with a Separation from Service,
shall be paid to Executive during the 6-month period following his Separation
from Service to the extent that the Company reasonably determines that Executive
is a “specified employee” at the time of such Separation from Service (within
the meaning of Section 409A) and that paying such amounts at the time or times
indicated in this Agreement would be a prohibited distribution under Section
409A(a)(2)(b)(i) of the Code. If the payment of any such amounts is
delayed as a result of the previous sentence, then on the first business day
following the end of such 6-month period (or such earlier date upon which such
amount can be paid under Section 409A without being subject to such additional
taxes, including as a result of Executive’s death), the Company shall pay to
Executive a lump-sum amount equal to the cumulative amount that would have
otherwise been payable to Executive during such 6-month period, without interest
thereon.
2.
Confidential
Information; Proprietary Information, etc.
(a)
Obligation
to Maintain Confidentiality. Executive acknowledges that any Proprietary
Information disclosed or made available to Executive or obtained, observed or
known by Executive as a direct or indirect consequence of his employment with or
performance of services for the Company or any of its Affiliates during the
course of his performance of services for, or employment with, any of the
foregoing Persons (whether or not compensated for such services) and during the
period in which Executive is receiving Severance Payments, are the property of
the Company and its Affiliates. Therefore, Executive agrees that he will
not at any time (whether during or after Executive’s term of employment)
disclose or permit to be disclosed to any Person or, directly or indirectly,
utilize for his own account or permit to be utilized by any Person any
Proprietary
Information
or Records for any reason whatsoever without the Board’s consent.
Executive agrees to deliver to the Company at the termination of his employment,
as a condition to receipt of the next or final payment of compensation, or at
any other time the Company may request in writing (whether during or after
Executive’s term of employment), all Records which he may then possess or have
under his control. Executive further agrees that any property situated on the
Company’s or its Affiliates’ premises and owned by the Company or its
Affiliates, including disks and other storage media, filing cabinets or other
work areas, is subject to inspection by Company or its Affiliates and their
personnel at any time with or without notice.
(b)
Ownership
of Property.
Executive acknowledges that all inventions, innovations, improvements,
developments, methods, processes, programs, designs, analyses, drawings, reports
and all similar or related information (whether or not patentable) that relate
to the Company’s or any of its Affiliates’ actual or anticipated business,
research and development, or existing or future products or services and that
are conceived, developed, contributed to, made, or reduced to practice by
Executive (either solely or jointly with others) while employed by the Company
or any of its Affiliates (including any of the foregoing that constitutes any
Proprietary Information or Records) (“Work Product”) belong to the
Company or such Affiliate and Executive hereby assigns, and agrees to assign,
all of the above Work Product to the Company or such Affiliate. Any
copyrightable work prepared in whole or in part by Executive in the course of
his work for any of the foregoing entities shall be deemed a “work made for
hire” under the copyright laws, and the Company or such Affiliate shall own all
rights therein. To the extent that any such copyrightable work is not a “work
made for hire,” Executive hereby assigns and agrees to assign to Company or such
Affiliate all right, title and interest, including without limitation, copyright
in and to such copyrightable work. Executive shall promptly disclose such
Work Product and copyrightable work to the Board and perform all actions
reasonably requested by the Board (whether during or after Executive’s term of
employment) to establish and confirm the Company’s or its Affiliate’s ownership
(including, without limitation, execution of assignments, consents, powers of
attorney and other instruments). Notwithstanding anything contained in
this Section
2(b) to the contrary, the Company’s ownership of Work Product
does not apply to any invention that Executive develops entirely on his own time
without using the equipment, supplies or facilities of the Company or its
Affiliates or Subsidiaries or any Proprietary Information (including trade
secrets), except that the Company’s ownership of Work Product does include those
inventions that: (a) relate to the business of the Company or its
Affiliates or Subsidiaries or to the actual or demonstrably anticipated research
or development relating to the Company’s business; or (b) result from any work
that Executive performs for the Company or its Affiliates or
Subsidiaries.
(c)
Third
Party Information. Executive understands that
the Company and its Affiliates will receive from third parties confidential or
proprietary information (“Third
Party Information”) subject to a duty on the Company’s and its
Affiliates’ part to maintain the confidentiality of such information and to use
it only for certain limited purposes. During the term of Executive’s
employment and thereafter, and without in any way limiting the provisions
of Sections
2(a) and 2(b) above, Executive
shall hold Third Party Information in the strictest confidence and shall not
disclose to anyone (other than personnel of the Company or its Affiliates
who need to know such information in connection with their work for the Company
or its Affiliates) or use, except in connection with his work for the Company or
its Affiliates, Third Party Information unless expressly authorized by a member
of the Board in writing.
(d)
No
Restriction on Executive’s Use of Prior Knowledge. Nothing in this Section 2 or in the
definitions of Proprietary Information or Third Party Information shall be
construed to prevent Executive from disclosing or using in future employment or
business ventures (i) any information known to him prior to the Start Date,
(ii) his general knowledge and experience or (iii) information known
or which becomes generally known to and available for use by the public other
than as a direct or indirect result of Executive’s acts or omissions to
act.
(e)
Use of
Confidential Information of Prior Employers, etc. Executive will abide by
any enforceable obligations contained in any agreements that Executive has
entered into with his prior employers or other parties to whom Executive has an
obligation of confidentiality.
(f)
Compelled
Disclosure. If
Executive is required by law or governmental regulation or by subpoena or other
valid legal process to disclose any Proprietary Information or Third Party
Information to any Person, Executive will immediately provide the Company with
written notice of the applicable law, regulation or process so that the Company
may seek a protective order or other appropriate remedy. Executive will
cooperate fully with the Company and the Company’s Representatives in any
attempt by the Company to obtain any such protective order or other
remedy. If the Company elects not to seek, or is unsuccessful in
obtaining, any such protective order or other remedy in connection with any
requirement that Executive disclose Proprietary Information or Third Party
Information, and if Executive furnishes the Company with a written opinion of
reputable legal counsel acceptable to the Company confirming that the disclosure
of such Proprietary Information or Third Party Information is legally required,
then Executive may disclose such Proprietary Information or Third Party
Information to the extent legally required; provided,
however, that Executive will use his best efforts to ensure
that such Proprietary Information is treated confidentially by each Person to
whom it is disclosed.
3.
Nonsolicitation.
(a)
Nonsolicitation. As long as Executive
is an employee of the Company or any Affiliate thereof, and for one (1) year
thereafter, Executive shall not directly or indirectly through another
Person:
(i)
induce or attempt to induce any employee of the Company or any Affiliate to
leave the employ of the Company or such Affiliate, or in any way interfere with
the employment relationship between the Company or any Affiliate and any
employee thereof;
(ii)
hire or seek to hire any Person who is or was an employee of the Company or any
Affiliate as of the earlier of (A) the date that notice of termination of
Executive’s employment is given by Executive or the Company pursuant to this
Agreement, and (B) the Date of Termination; provided, however
, that Executive shall be permitted to hire any such employee who, at his or her
own initiative and not at the direct or indirect suggestion or behest of
Executive, approaches Executive after the Date of Termination for the purpose of
gaining employment with Executive, or responds to a general employment
advertisement that is not specifically directed at the employee, the Company’s
employees generally or any subset of the Company’s employees; or
(iii)
induce or attempt to induce any customer, client, supplier, licensee or other
business relation of the Company or any Affiliate (each, a “Business Relation”) to cease
doing business with the Company or such Affiliate, or in any other way interfere
with the business relationship between any Business Relation and the Company or
an Affiliate; provided, however
, that this restriction shall not apply to (A) Executive’s response
to an indication by a Business Relation, at his, her or its own initiative
and not at the direct or indirect suggestion or behest of Executive, of interest
in procuring services offered (directly or indirectly) by Executive, or
(B) any general advertisement that is not specifically directed at such
Business Relation, the Business Relations of the Company generally or any subset
of the Company’s Business Relations.
(b)
Acknowledgment. Executive acknowledges that
in the course of his employment with the Company and its Affiliates, he has and
will become familiar with the trade secrets and other Proprietary Information of
the Company and its Affiliates. It is specifically recognized by Executive that
his services to the Company and its Subsidiaries are special, unique and of
extraordinary value, that the Company has a protectable interest in prohibiting
Executive as provided in this Section 3 , that
money damages are insufficient to protect such interests, that there is adequate
consideration being provided to Executive hereunder, that such prohibitions are
necessary and appropriate without regard to payments being made to Executive
hereunder and that the Company would not enter this Agreement with Executive
without the restrictions of this Section 3 .
Executive further acknowledges that the provisions of this Section 3 are
separate and independent of the other sections of this Agreement.
(c)
Enforcement,
etc. If, at
the time of enforcement of Section 2 or 3 of this Agreement,
a court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographical area reasonable under such circumstances as determined by
the court shall be substituted for the stated period, scope or area.
Because Executive’s services are unique, because Executive has access to
Proprietary Information and for the other reasons set forth herein, the parties
hereto agree that money damages would be an inadequate remedy for any breach of
this Agreement. Therefore, without limiting the generality of Section 7(g), in the
event of a breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof.
(d) Submission
to Jurisdiction. The parties hereby:
(i) submit to the jurisdiction of any state or federal court sitting in
California in any action or proceeding arising out of or relating to Section 2
and/or 3
of this Agreement; (ii) agree that all claims in respect of such action or
proceeding may be heard or determined in any such court; and (iii) agree not to
bring any action or proceeding arising out of or relating to Section 2
and/or 3
of this Agreement in any other court. The parties hereby waive any defense
of inconvenient forum to the maintenance of any action or proceeding so
brought. The parties hereby agree that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.
GENERAL
PROVISIONS
4. Definitions.
“Affiliate” of any Person
means any other Person that directly or indirectly controls, is controlled by or
is under common control with such Person.
“Board” means the Company’s
board of directors or the board of directors or similar management body of any
successor of the Company.
“Person” means an individual,
a partnership, a limited liability company, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
“Proprietary Information”
means any and all data and information concerning the business affairs of the
Company or any of its Affiliates and not generally known in the industry in
which the Company or any of its Affiliates is or may become engaged, and any
other information concerning any matters affecting or relating to the Company’s
or its Affiliates businesses, but in any event Proprietary Information shall
include, any of the Company’s and its Affiliates’ past, present or prospective
business opportunities, including information concerning acquisition
opportunities in or reasonably related to the Company’s or its Affiliates
businesses or industries, customers, customer lists, clients, client lists, the
prices the Company and its Affiliates obtain or have obtained from the sale of,
or at which they sell or have sold, their products, unit volume of sales to past
or present customers and clients, or any other information concerning the
business of the Company and its Affiliates, their manner of operation, their
plans, processes, figures, sales figures, projections, estimates, tax records,
personnel history, accounting procedures, promotions, supply sources, contracts,
know-how, trade secrets, information relating to research, development,
inventions, technology, manufacture, purchasing, engineering, marketing,
merchandising or selling, or other data without regard to whether all of the
foregoing matters will be deemed confidential, material or important.
Proprietary Information does not include any information that Executive has
obtained from a Person other than an employee of the Company, which was
disclosed to him without a breach of a duty of confidentiality.
“Records” means (i) any and
all procedure manuals, books, records and accounts; (ii) all property of the
Company and its Affiliates, including papers, note books, tapes and similar
repositories containing Proprietary Information; (iii) all invoices and
commission reports; (iv) customerlists — partial and/or complete; (v) data
layouts, magnetic tape layouts, diskette layouts, etc.; (vi) samples; (vii)
promotional letters, brochures and advertising materials; (viii) displays and
display materials; (ix) correspondence and old or current proposals to any
former, present or prospective customer of the Company and its Affiliates; (x)
information concerning revenues and profitability and any other financial
conditions of the Company and its Affiliates; (xi) information concerning the
Company and its Affiliates which was input by Executive or at his direction,
under his supervision or with his knowledge, including on any floppy disk,
diskette, cassette or similar device used in, or in connection with, any
computer, recording devices or typewriter; (xii) data, account information or
other matters furnished by customers of the Company and its Affiliates; and
(xiii) all copies of any of the foregoing data, documents or devices whether in
the form of carbon copies, photo copies, copies of floppy disks, diskettes,
tapes or in any other manner whatsoever.
“Subsidiary” means any
corporation of which the Company owns securities having a majority of the
ordinary voting power in electing the board of directors directly or through one
or more subsidiaries.
5. Notices. Any notice provided for in
this Agreement must be in writing and must be either personally delivered,
mailed by first class United States mail (postage prepaid, return receipt
requested) or sent by reputable overnight courier service (charges prepaid) or
by facsimile to the recipient at the address below indicated:
If to Executive: to
the most current home address on file with the Company’s Human Resources
department,
If to the
Company:
00000
Xxxx Xxxxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxxx 00000
|
Attention:
|
Chief
Executive Officer and Vice President of Human Resources
|
|
Tel
No.:
|
(000)
000-0000
|
|
Fax
No.:
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(000)
000-0000
|
or such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending party.
6. Executive’s
Representations and Warranties. Executive represents
and warrants that he has full and authority to enter into this Agreement and
fully to perform his obligations hereunder, that he is not subject to any
non-competition agreement, and that his past, present and anticipated future
activities have not and will not infringe on the proprietary rights of others,
including, but not limited to, proprietary information rights or interfere with
any agreements he has with any prior employee. Executive further
represents and warrants that he is not obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, which
would conflict with or result in a breach of this Agreement or which would in
any manner interfere with the performance of his duties for the
Company.
7. Section
409A.
(a) General. The
payments and benefits provided hereunder are intended to be exempt from or
compliant with the requirements of Section 409A. Notwithstanding any
provision of this Agreement to the contrary, in the event that following the
effective date hereof, the Company reasonably determines that any payments or
benefits hereunder
are not
either exempt from or compliant with the requirements of Section 409A, the
Company and Executive shall work together to adopt such amendments to this
Agreement or adopt such other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that are necessary or appropriate (i) to preserve the intended tax treatment of
the payments and benefits provided hereunder, to preserve the economic benefits
with respect to such payments and benefits, and/or (ii) to exempt such payments
and benefits from Section 409A or to comply with the requirements of Section
409A and thereby avoid the application of penalty taxes thereunder, provided¸ that the Company
shall have no obligation to take any action described in this Section 7(a) or to
indemnify Executive for any failure to take any such action.
(b)
Certain
Reimbursements. To the extent that any reimbursements
hereunder constitute taxable compensation to Executive, such reimbursements
shall be made to Executive promptly, but in no event after December 31st of the
year following the year in which the expense was incurred, the amount of any
such amounts reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, and Executive’s right to reimbursement of
any such expenses shall not be subject to liquidation or exchange for any other
benefit.
8. General
Provisions.
(a) Expenses. Each party shall bear his or
its own expenses in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement.
(b) Severability. Whenever possible,
each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.
(c) Complete
Agreement. This
Agreement and those documents expressly referred to herein embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way,
including without limitation, the Prior Agreement (as amended).
(d) Counterparts;
Facsimile Transmission. This Agreement may be
executed in two counterparts, each of which shall deemed to be an original and
both of which taken together shall constitute one and the same
agreement. Each party to this Agreement agrees that it will be bound by
its own telecopied signature and that it accepts the telecopied signature of
each other party to this Agreement.
(e) Successors
and Assigns.
Except as otherwise provided herein, this Agreement shall bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
successors and assigns;
provided that the rights and obligations of Executive under this
Agreement shall not be assignable and, provided further that, the
rights and obligations of the Company may be assigned to any Affiliate of the
Company.
(f) Choice of
Law; Jurisdiction. All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
and construed in accordance with the internal laws of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware. The parties hereby: (i) submit to the jurisdiction of any state
or federal court sitting in California in any action or proceeding arising out
of or relating to Agreement; (ii) agree that all claims in respect of such
action or proceeding may be heard or determined in any such court; and (iii)
agree not to bring any action or proceeding arising out of or relating to this
Agreement
in any
other court. Executive hereby waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought and waives any bond,
surety or other security that might be required of any other party with respect
thereto. The parties hereby agree that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.
(g) Remedies. Each of the parties to this
Agreement will be entitled to enforce its rights under this Agreement
specifically to recover damages and costs (including reasonable attorney’s fees)
caused by any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this
Agreement.
(h) Amendment
and Waiver. The
provisions of this Agreement may be amended or and waived only with the prior
written consent of the Company and Executive.
(i) Business
Days. If any time
period for giving notice or taking action hereunder expires on a day which is a
Saturday, Sunday or holiday in the state in which the Company’s chief executive
office is located, the time period shall be automatically extended to the
business day immediately following such Saturday, Sunday or
holiday.
(j)
Termination. This
Agreement shall survive the termination of Executive’s employment with the
Company and shall remain in full force and effect after such
termination.
(k) No
Waiver. A waiver
by any party hereto of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy that such party would otherwise
have on any future occasion. No failure to exercise nor any delay in
exercising on the part of any party hereto, any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
provided are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights or remedies provided by law.
(l) Insurance. The Company, at its
discretion, may apply for and procure in its own name for its own benefit life
and/or disability insurance on Executive in any amount or amounts considered
available. Executive agrees to cooperate in any medical or other examination,
supply any information, and to execute and deliver any applications or other
instruments in writing as may be reasonably necessary to obtain and constitute
such insurance. Executive hereby represents that he has no reason to believe
that his life is not insurable at rates now prevailing for healthy men of his
age.
(m) Offset. Except as prohibited
by applicable law, whenever the Company or any of its Subsidiaries is obligated
to pay any sum to Executive or any Affiliate or related person thereof pursuant
to this Agreement, any bona fide debts that Executive or such Affiliate or
related person owes to the Company or any of its Subsidiaries may be deducted
from that sum before payment, to the greatest extent permitted under applicable
law.
(n) Withholding. The Company and its
Subsidiaries shall be entitled to deduct or withhold from any amounts owing from
the Company or any of its Subsidiaries to Executive any federal, state,
provincial, local or foreign withholding taxes, excise taxes, or employment
taxes ( “Taxes” )
imposed with respect to Executive’s compensation or other payments from the
Company or any of its Subsidiaries or Executive’s ownership interest in the
Company, including, but not limited to, wages, bonuses, the receipt or exercise
of stock options and/or the receipt or vesting of restricted stock.
(o) Insurance
and Indemnification. For the period from the date of this Agreement
through at least the tenth anniversary of Executive’s termination of employment
from the Company, the Company shall maintain Executive as an insured party on
all directors’ and officers’ insurance maintained by the Company for the benefit
of its directors and officers on at least the same basis as all other
covered individuals and provide Executive with at least the same corporate
indemnification as it provides to the peer executives of the
Company.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date set forth in the
Preamble hereto.
|
On
Assignment, Inc.
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By:
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/s/ Xxxxx Xxxxxxx | ||
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Name:
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Xxxxx
Xxxxxxx
|
||
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Title:
|
Executive
Vice President
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||
| /s/ Xxxxxx XxXxxxx | |||
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Xxxxxx
XxXxxxx
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