Executive Employment Agreement - Exult Inc. and Michael J. Salvino
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made as of June 27, 2000 by and between Exult, Inc. (the “Company”), and Michael J. Salvino (“Executive”).
1. Duties and Responsibilities.
(a) Executive shall serve as the Company’s Executive Director, Business Development and shall report to and perform the duties and responsibilities assigned to Executive by the Company’s Vice President, Business Development, or such other person as may be designated by the Company’s Chief Executive Officer (the “CEO”).
(b) Executive shall be based at the Company’s office located at Irvine, California. Executive will be required to attend an extensive number of meetings at prospective clients and clients or meetings for other business purposes outside of Southern California. While not at a client site or travelling for other business purposes, Executive may work from home.
2. Period of Employment. Executive’s employment with the Company shall be governed by this Agreement for the period commencing June 26, 2000 and continuing until this Agreement terminates pursuant to written notice by either the Company or Executive. The period during which Executive’s employment continues in effect shall be hereafter referred to as the “Employment Period.” However, notwithstanding the foregoing, commencement of Executive’s employment will be subject to Executive’s lawful and effective cessation of any employment or consulting relationship with any third party.
3. Cash Compensation.
(a) Executive’s initial base salary shall be $250,000 per year payable in accordance with the Company’s standard payroll schedule. Executive’s base salary shall be subject to annual review by the Company, and may be increased or decreased in the Company’s discretion.
(b) As part of the sales team, Executive may be eligible for a portion of a deal pool, to be established and defined at the sole discretion of the Company, for new business booked based on Executive’s performance and contribution. Executive’s annual sales incentive target will be $150,000, prorated for the portion of the fiscal year worked according to the Company policy. The incentive payment is intended to reward contribution to Company’s performance over an entire fiscal year, and consequently will be paid only if Executive is employed and in good standing at the time of incentive payments, which generally occurs within 45 days after the close of the Company’s fiscal year.
(c) The Company may deduct and withhold from the compensation payable to Executive hereunder any and all applicable federal, state and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statutes, regulations, ordinances or orders, as well as any amounts that may be owed by Executive to the Company from time to time.
4. Equity Compensation. Pursuant and subject to the terms and conditions of the Company’s 2000 Equity Incentive Plan and approval by the Company’s Board of Directors, the Company will grant to Executive an option to purchase 125,000 shares of the Company’s Common Stock. The option will vest and become exercisable in installments over time beginning on the first anniversary of the commencement of the Employment Period and continuing for three years thereafter. The option price will be the fair market value per share of Common Stock on the date of grant.
5. Expense Reimbursement. In addition to the compensation specified in Section 3, Executive shall be entitled, in accordance with the Company’s reimbursement policies in effect from time to time, to receive reimbursement from the Company for reasonable business expenses incurred by Executive in the performance of his duties hereunder, provided Executive furnishes the Company with vouchers, receipts and other details of such expenses in the form required by the Company sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of federal and state taxing authorities.
6. Fringe Benefits.
(a) Executive shall, throughout the Employment Period, be eligible to participate in all executive life and disability insurance programs, group term life insurance plans, group health plans, accidental death and dismemberment plans and disability programs and other executive perquisites that are made available to the Company’s executives and for which Executive qualifies under the Company’s policies.
(b) Executive shall earn vacation time during the Employment Period at the rate of four (4) weeks per year. Vacation shall accrue and be taken pursuant to the Company’s vacation benefit policy set forth in the Company’s Employee Handbook.
7. Employment at Will; Severance.
(a) Executive’s employment with the Company is at will and not for a specific term and may be terminated by either the Company or Executive at any time, for any reason without notice. Similarly, the Company may change Executive’s responsibilities, duties, title, and reporting relationships at any time for any reason.
(b) If Executive voluntarily resigns his employment without Good Reason as defined in Section 7(c), or if the Company terminates Executive’s employment for Cause, as defined below, the Company shall have no further obligation to Executive under this Agreement or any other severance obligation other than for accrued but unpaid salary and vacation as of the date of termination. For purposes of this Agreement, “Cause” means (i) Executive has engaged in any “Misconduct” as defined as of the date of this Agreement in the Company’s 2000 Equity Incentive Plan; (ii) repeated failure by Executive to achieve reasonable performance standards that have been described by the Company in writing and communicated to Executive in reasonable detail, or neglect by Executive in the performance of duties assigned to him that continues or recurs more than ten days after Executive’s receipt of written notice from the Company specifying such neglect in reasonable detail and demanding cure; or (iii) Executive’s
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conviction of, or plea of nolo contendere to, any felony, or any misdemeanor involving moral turpitude or fraud.
(c) If the Company terminates Executive’s employment other than for Cause, death or disability, or if Executive resigns his employment with Good Reason, then contingent upon execution and delivery to the Company of an unconditional release in form satisfactory to the Company of all claims against the Company and its affiliates and the officers, directors, and employees of the Company and its affiliates, and any other persons that the Company or its affiliates would be required to indemnify, arising from or in connection with this Agreement or Executive’s employment with the Company or the termination of that employment, Executive will be entitled to severance in an amount equal to one year’s annual salary, measured by Executive’s salary as in effect on the first day of the fiscal year in which termination occurs, and payable in a lump sum within 90 days of termination. For these purposes, “resignation with Good Reason” means breach by the Company of this Agreement in any material respect and failure to cure such breach within 15 days of receipt from Executive of a written demand for cure, followed by resignation by Executive of his employment within 30 days after the end of such 15-day cure period.
(d) Notwithstanding anything herein to the contrary, the Company shall have no obligation to make any severance payments to Executive, and Executive shall return to the Company any severance payments made by the Company to Executive, if at any time before or after termination of employment Executive breaches in any material respect any contractual or fiduciary obligation to the Company, and if such breach is susceptible of cure, fails to cure such breach within thirty days of the Company’s delivery to Executive of notice of the breach and demand for cure, and any severance payment obligation of the Company will be suspended pending such cure.
8. Representations and Restrictive Covenants.
(a) In order to induce the Company to hire him as set forth in this Agreement, Executive represents, warrants and undertakes to the Company as follows:
(i) Executive has been fully advised by counsel independent of the Company of his obligations under and the terms of all agreements and other obligations applicable to his relationship with all prior employers or parties engaging Executive’s services (collectively, the “Prior Employers”). Executive does and will rely upon his own judgment and the advice he receives from counsel independent of the Company in any action he takes (or decides not to take) in relation to all of the matters referred to in this Agreement, but Executive will keep the Company fully informed of the nature and extent of his obligations to all Prior Employers at any time and any steps Executive proposes to take to effect his disengagement from all Prior Employers.
(ii) Executive has had an opportunity to be advised by counsel independent of the Company of his obligations under and the terms of this Agreement and the other documents referenced in Section 14.
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(iii) Executive is under no contractual restriction or other restrictions or obligations that are inconsistent with the execution of this Agreement or the performance of Executive’s duties and covenants hereunder, and will not breach any obligations to any Prior Employer.
(iv) Without in any way detracting from the generality of paragraph (iii), Executive will not, during his employment with the Company, improperly use or disclose any confidential information, proprietary information or trade secrets belonging to any Prior Employer, or bring onto the premises of the Company or in any other way use or refer to any unpublished document or any property belonging to any Prior Employer unless consented to in writing by such Prior Employer, and will return all property and confidential information belonging to any Prior Employer. This is in addition to all obligations of Executive under the Confidential Information and Assignment of Inventions Agreement.
(v) Executive is under no physical or mental impairment that would interfere with Executive’s ability to perform his duties hereunder.
(vi) Executive has full right and power to enter into this Agreement and perform his duties and covenants hereunder without any consent from any third party.
(vii) Executive’s performance of his duties and covenants hereunder will not infringe the rights, including intellectual property rights, of any third party.
(b) During the Employment Period:
(i) Executive shall devote his full business time and energy solely and exclusively to the performance of his duties to the Company, and to render his services under this Agreement fully, faithfully, diligently, and to the best of his ability.
(ii) Executive shall not directly or indirectly provide services to or through any person, firm or other entity except the Company, unless otherwise authorized in writing by the CEO.
(iii) Executive shall not render any services of any kind or character for Executive’s own account or for any other person, firm or entity without first obtaining the written consent of the CEO.
Executive, however, shall have the right to perform such incidental services as are necessary in connection with (a) Executive’s private passive investments, but only if Executive is not obligated or required to (and shall not in fact) devote any managerial efforts which interfere with the services required to be performed by him, or (b) Executive’s charitable or community activities, or participation in trade or professional organizations, but only if such incidental services do not interfere with the performance of Executive’s services to the Company.
9. Non-Competition. During any period for which Executive is receiving wage or severance payments from the Company, Executive shall not, without prior written consent of the CEO, directly or indirectly own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed or engaged by or connected in any manner
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with, any enterprise that is engaged in any business competitive with the Company; provided, however, that such restriction shall not apply to any passive investment representing an interest of less than one-half of one percent (.5%) of the publicly-traded common stock of any company or other enterprise which was not, at the time such investment was made, engaged in a business competitive with the Company’s business. This Section 9 does not limit Executive’s obligations under the Confidential Information and Assignment of Inventions Agreement referred to in Section 11.
10. Non-Solicitation. During the Employment Period and for one (1) year following termination of Executive’s employment, Executive shall not encourage or solicit any of the Company’s employees to leave the Company’s employ for any reason or interfere in any other manner with employment relationships at the time existing between the Company and its employees; or solicit any client of the Company, induce any of the Company’s clients to terminate its existing business relationship with the Company or interfere in any other manner with any existing business relationship between the Company and any client or other third party. Executive acknowledges that monetary damages may not be sufficient to compensate the Company for any economic loss that may be incurred by reason of his breach of the foregoing restrictive covenants. Accordingly, in the event of any such breach, the Company shall, in addition to any remedies available to the Company at law, be entitled to obtain equitable relief in the form of an injunction precluding Executive from continuing such breach.
11. Proprietary Information and Confidentiality.
(a) As a condition precedent to Executive’s employment with the Company, Executive will execute the Company’s standard Employee Proprietary Information and Inventions Agreement. Executive’s obligations pursuant to the Confidential Information and Assignment of Inventions Agreement will survive termination of Executive’s employment with the Company.
(b) The Company’s business involves access to confidential and/or proprietary information about the Company’s clients and employees of the Company’s clients (“Client Information”). Executive will comply with all policies and requirements (including without limitation execution of agreements) imposed by the Company from time to time to protect Client Information, including in response to client requirements or applicable laws and regulations regarding protection of employee personal information.
12. Successors and Assigns. This Agreement is personal in its nature and the Executive shall not assign or transfer his rights under this Agreement.
13. Notices. Any notices, demands or other communications required or desired to be given by any party shall be in writing and shall be validly given to another party if served either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand or other communication shall be served personally, service shall be conclusively deemed made at the time of such personal service. If such notice, demand or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after the deposit thereof in the United States mail addressed
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to the party to whom such notice, demand or other communication is to be given as hereinafter set forth:
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To the Company: | Exult, Inc. | |
| 4 Park Plaza, Suite 1000 | ||
| Irvine, California 92614 | ||
| Attention: Chief Executive Officer | ||
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With a copy to: | General Counsel | |
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To Executive: | At his address of record as maintained in the Company’s employment files | |
Any party may change its address for the purpose of receiving notices, demands and other communications by providing written notice to the other party in the manner described in this paragraph.
14. Governing Documents. This Agreement, the Employee Proprietary Information and Inventions Agreement, and the separate documentation related to Executive’s stock options together constitute the entire agreement and understanding of the Company and Executive with respect to the terms and conditions of Executive’s employment with the Company and the provision by the Company of any consideration or severance benefits, and supersede all prior and contemporaneous written or verbal agreements and understandings between Executive and the Company relating to such subject matter. This Agreement may only be amended by written instrument signed by Executive and an authorized officer of the Company. Any and all prior agreements, understandings or representations relating to the Executive’s employment with the Company are terminated and cancelled in their entirety and are of no further force or effect.
15. Governing Law. This Agreement will be construed and interpreted under the laws of the State of Illinois applicable to agreements executed and to be wholly performed within the State of Illinois. If any provision of this Agreement as applied to any party or to any circumstance is adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken and the remainder of this Agreement shall continue in full force and effect.
16. Remedies. All rights and remedies provided pursuant to this Agreement or by law shall be cumulative, and no such right or remedy shall be exclusive of any other. A party may pursue any one or more rights or remedies hereunder or may seek damages or specific performance in the event of another party’s breach hereunder or may pursue any other remedy by law or equity, whether or not stated in this Agreement.
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17. Arbitration. Any and all disputes between Executive and the Company that arise out of Executive’s employment with the Company shall be resolved through final and binding arbitration. This shall include, without limitation, disputes relating to this Agreement, Executive’s employment by the Company or the termination thereof, claims for breach of contract or breach of the covenant of good faith and fair dealing, and any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the California Fair Employment and Housing Act, or any other federal, state or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way the subject of Executive’s employment with the Company or its termination. The only claims not covered by this Agreement are claims for benefits under the workers’ compensation or unemployment insurance laws, which will be resolved pursuant to those laws. Binding arbitration will be conducted in Illinois in accordance with the rules and regulations of the American Arbitration Association. Each party will split the cost of the arbitration filing and hearing fees, and the cost of the arbitrator; each side will bear its own attorneys’ fees, that is, the arbitrator will not have authority to award attorneys’ fees unless a statutory section at issue in the dispute authorizes the award of attorneys’ fees to the prevailing party, in which case the arbitrator has authority to make such award as permitted by the statute in question. Executive understands and agrees that the arbitration shall be instead of any civil litigation and that this means that he is waiving his right to a jury trial as to such claims. The parties further understand and agree that the arbitrator’s decision shall be final and binding to the fullest extent permitted by law and enforceable by any court having jurisdiction.
18. No Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed as a waiver of any later breach of that provision.
19. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.
| Exult, Inc. | ||
| By: | ||
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Kevin M. Campbell Operations President | ||
| Michael J. Salvino | ||
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