Exhibit 10.1
CONFIDENTIAL
SEPARATION
AGREEMENT
This Separation
Agreement (“ Agreement ”), dated as of
January 14, 2008, (the “Execution Date”), is made
by and among On Assignment, Inc. (the “ Company
”) and Shawn Mohr (“ Mohr ”).
WHEREAS, the
Company and Mohr are parties to that certain Senior Executive
Agreement, dated April 14, 2004, which sets forth the terms of
Mohr’s employment with the Company (the “ Employment
Agreement ”);
WHEREAS, the
Company has granted to Mohr certain restricted stock units (“
RSUs ”) under RSU agreements dated August 3,
2005, May 22, 2006 and August 1, 2006 (together, the
“ RSU Agreements ”) pursuant to the
Company’s Restated 1987 Stock Option Plan (as Amended and
Restated through April 17, 2007) (the “ Plan
”);
WHEREAS the
Company has granted to Mohr certain options to purchase Company
common stock (“ Options ”) under stock option
agreements dated April 7, 1997, January 13, 2004,
April 14, 2004 and under two additional stock option
agreements, each dated August 9, 2004 (together, the “
Option Agreements ”) pursuant to the Plan, as
described in further detail on Exhibit C
hereto;
WHEREAS, the
Company and Mohr wish to convert certain of the Options into
cash-settled stock appreciation rights;
WHEREAS, the
Company maintains a 2007 Executive Incentive Plan applicable to
Mohr (as described in Exhibit A to the Company’s
Compensation Committee Meeting Minutes, dated March 23, 2007)
(the “ Bonus Plan ”);
WHEREAS, Mohr and
the Company have mutually determined to provide for the termination
of Mohr’s employment with the Company, on the terms and
conditions set forth herein;
NOW, THEREFORE, in
consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and Mohr (collectively, the
“ Parties ”) hereby agree as follows:
1
Termination of Employment and Agreements.
(a)
Termination and Resignation
of Positions . Effective as of
5:00 p.m. (pst) on December 31, 2007 (the “
Termination Date ”), Mohr’s employment with the
Company and its subsidiaries and affiliates shall terminate and
Mohr shall cease to be an employee of any and all of the
foregoing. In addition, effective as of the Termination Date,
(i) Mohr hereby resigns any and all offices and directorships
he may hold with the Company or any of its subsidiaries or
affiliates, (ii) the Employment Agreement is terminated and of
no further force or effect, provided , that Sections 2 - 7
of the Employment Agreement shall survive the preceding
terminations, and (iii) the Bonus Plan is terminated and of no
further force or effect.
(b)
Termination of RSUs . Mohr hereby acknowledges and
agrees that, as of the Termination Date, (i) Mohr has been
granted a total of 75,061 RSUs under the RSU Agreements;
(ii) a total of 35,349 of such RSUs have vested and the shares
underlying such vested RSUs have either been delivered to Mohr or
withheld to satisfy taxes or other obligations owed by Mohr;
(iii) the remaining 39,712 unvested RSUs so granted are hereby
forfeited and terminated; (iv) the Company has no further
obligation under or in connection with any of the RSUs or RSU
Agreements; and (v) the RSU Agreements are terminated and of
no further force or effect.
(c)
Termination of Options; Conversion to Stock Appreciation
Rights . Mohr hereby acknowledges and agrees that
(i) as of the Termination Date, Mohr has been granted a total
of 318,000 Options under the Option Agreements, of which
(A) 8,000 Options have been previously canceled,
(B) 271,316 Options have vested and become exercisable,
(C) 38,684 Options remain unvested and unexercisable,
(D) 74,120 Options have been exercised, and (E) 197,196
Options would, absent this Section 1(c), remain vested and
exercisable immediately following the Termination Date (the Options
described in this Section 2(c)(i)(E), as detailed on
Exhibit C hereto, the “ Currently Exercisable
Options ”); (ii) Mohr has not and will not exercise
any previously unexercised Options at any time on or after the
Termination Date, including without limitation, any of the
Currently Exercisable Options; (iii) on or as soon as
practicable after the Execution Date, the Currently Exercisable
Options will be converted into an equivalent number of fully vested
and exercisable, cash-settled stock appreciation rights (“
SARs ”) at the same exercise price and otherwise on
substantially the same terms and conditions as those applicable to
the Currently Exercisable Options so converted into SARs, as
provided in the SAR Agreements in the form attached hereto as
Exhibit B (the “ SAR Agreements ”);
(iv) Mohr will cooperate with the Company and take all actions
necessary or desirable to convert the Currently Exercisable Options
into SARs, including without limitation, entering into SAR
Agreements with the Company; and (v) the Options and the
Option Agreements are hereby terminated and of no further force or
effect. Mohr further acknowledges and agrees that, upon
conversion of the Currently Exercisable Options into SARs, the
Company shall have no further obligations, and Mohr shall have no
further rights, under or in connection with any of the Options or
Option Agreements.
2
Accrued Obligations; Severance Payments; Exclusivity; Return of
Property.
(a)
Accrued
Obligations . On or as soon as practicable after the
Termination Date, the Company shall (i) pay to Mohr all unpaid
salary and vacation accrued but not paid through the Termination
Date, and (ii) reimburse to Mohr all outstanding reimbursable
expenses incurred by Mohr and submitted to the Company prior to the
Termination Date in accordance with the Company’s policies
and practices, to the extent not reimbursed prior to the
Termination Date.
(b)
Severance
. In
consideration of Mohr’s execution and non-revocation of the
Release (as defined below) and in further consideration of
Mohr’s agreement to comply with the Additional Covenants (as
defined below), subject to Section 6 below, the Company shall
pay to Mohr (the “ Severance Payments
”):
(i)
Mohr’s base
salary at the rate in effect as of the Termination Date ($288,750
per year) for a period of one year from and after the Termination
Date, in satisfaction of the salary continuation obligations
contained in Section 1(c)(iii)(A) of the Employment
Agreement, payable in substantially equal installments on the
Company’s generally applicable 2008 payroll
dates;
(ii)
a lump-sum payment of
$57,750, payable no later than March 31, 2008 in lieu of any
bonus that may have become payable under the Bonus Plan absent
Mohr’s termination of employment;
(iii)
a lump-sum payment of
$15,348.93 in lieu of the continuation healthcare insurance
benefits described in Section 1(c)(iii)(A) of the
Employment Agreement, payable no later than March 31, 2008;
and
(iv)
$231,000 payable in
substantially equal installments on the Company’s generally
applicable 2009 payroll dates, in any event, payable in full during
calendar year 2009 only.
Notwithstanding the foregoing,
the Company shall make no Severance Payments to Mohr prior to the
expiration of any revocation period applicable under the Release
and, to the extent that any Severance Payment would otherwise have
been paid prior to such expiration, such Severance Payment shall be
paid as soon as practicable following the expiration of such
revocation period, but in no event more than fifteen (15) days
after such expiration (provided that Mohr has not revoked the
Release). The Company’s obligation to continue to
provide Mohr with Severance Payments described in Sections
2(b)(i) and 2(b)(iv) above shall cease if Mohr furnishes
services to a third party as a senior executive. Mohr shall
be under no obligation to seek or accept any employment during the
Severance Period. Mohr has not, as of the Execution Date,
entered into any arrangement to furnish such services and agrees to
provide Company with timely notice of his acceptance of any
engagement to furnish services to a third party as a senior
executive.
(c)
Exclusivity of
Benefits . Except as expressly provided in
Section 2 of this Agreement, Mohr shall not be entitled to any
additional payments or benefits in connection with his employment
or the termination thereof or under or in connection with any
contract, agreement or understanding between Mohr and the
Company. All employee benefits, including without limitation,
any medical, dental, life insurance, disability insurance and other
benefits provided or funded in whole or in part by the Company
shall cease as of the Termination Date.
(d)
Return of Property
. By signing
this Agreement, Mohr represents that he has returned to the Company
all property of the Company, including without limitation, original
versions and/or copies of documents, spreadsheets, presentations or
other materials, in any media or format, representing Company
Proprietary Information and/or Records, as those terms are defined
in the Employment Agreement, all keys, access cards, credit cards,
calling cards, computer hardware and software, cellular phones and
other mobile communications devices. Mohr represents that the
inventory attached hereto as Exhibit E (the “
Office Inventory ”) sets forth the complete and
comprehensive list of all files, documents, books, equipment, other
tangible items or materials, in any and all media retained by Mohr
from his Company office and further warrants that such Office
Inventory is comprised solely of Mohr’s personal items Mohr
has not removed any Company Proprietary Information and/or
Records. The Company agrees to furnish Mohr, for his
own use, a Blackberry communication device. Mohr
understands and acknowledges that Company maintains no service
contracts associated with the Blackberry. It will be
Mohr’s sole responsibility, at Mohr’s sole cost and
expense, to arrange for any service contracts he deems necessary
for continued use of the Blackberry.
3
Release of Claims . Mohr agrees that, as a condition
to Mohr’s right to receive the Severance Payments, within the
timeframe specified in the release of claims attached hereto as
Exhibit A (the “ Release ”), but in any
event not prior to the Termination Date, Mohr shall execute,
deliver to the Company and not revoke the Release.
4
Covenants.
(a)
Existing Covenants
. Mohr hereby
acknowledges and agrees that he is bound by certain restrictive
covenants set forth in the Sections 2 and 3 of the Employment
Agreement (the “ Existing Covenants ”) and that
nothing contained herein shall alter Mohr’s obligations under
the Existing Covenants, which obligations shall survive
Mohr’s termination of employment.
(b)
Additional
Covenants . In addition to the Existing Covenants,
in consideration of the Severance Payments contained herein, Mohr
further agrees that Mohr will not use trade
secrets or other Proprietary Information or Records (as defined in
the Employment Agreement) to: (i) directly or indirectly,
through another person or entity, divert, take away, attempt to
divert or take away, call on or solicit any business from any of
the suppliers, licensees, clients, customers or prospective
customers of the Company or its subsidiaries or affiliates; and/or
(ii) ****directly or indirectly, through another person or
entity, induce or attempt to induce any employee of the Company or
any of its subsidiaries or affiliates, including without
limitation, the employees named on Exhibit D to this
Agreement, to leave the employ of the Company, or in any way
unlawfully interfere with the employment relationship between the
Company or any of its subsidiaries or affiliates and any employee
thereof. For the purposes of this provision,
“prospective customer” means any person or entity whom
the Company or any of its subsidiaries or affiliates has actually
engaged in discussions with to become a client or customer at any
time during the two (2)-year period preceding the Termination Date
(the “ Additional Covenants ” and, together with
the Existing Covenants, the “ Covenants ”)
****.
5
Non-Disparagement. Mohr agrees that he will not make
any statement, publicly or privately, to any individual or entity,
including, without limitation, clients, customers, employees,
financial or credit institutions or news agencies, in any case,
which could reasonably be expected to disparage, defame, libel or
slander the Company, any of its affiliates or any of their
respective employees, officers or directors. Company
agrees that it will not make or issue any statement to any
individual or entity, including, without limitation, clients,
customers, employees, prospective employers or news agencies, in
any case, which could reasonably be expected to disparage, defame,
libel or slander Mohr. In accordance with Company policy, if
requested by a potential new employer or other party validating
Mohr’s past employment, Company will confirm Mohr’s
dates of employment and title at the time of Mohr’s
termination.
6
Breach of Covenants. Mohr acknowledges and agrees that
a breach by Mohr of any of the covenants or restrictions contained,
reaffirmed or referenced herein, including without limitation the
Covenants, will cause irreparable damage to the Company, the exact
amount of which will be difficult to ascertain, and that the
remedies at law for any such breach will be inadequate.
Accordingly, Mohr agrees that if he breaches or attempts to breach
any of the foregoing, the Company shall be entitled to temporary or
permanent injunctive relief with respect to any such breach or
attempted breach (in addition to any other remedies, at law or in
equity, as may be available to the Company), without posting bond
or other security. If the Company is required to enforce any
of its rights hereunder, Mohr agrees to reimburse the Company for
all reasonable costs and expenses, including reasonable
attorneys’
fees, incurred by the
Company in connection with such enforcement. In addition, if
the Company reasonably determines that Mohr has breached any such
restriction or covenant (including without limitation, the
Covenants), Mohr hereby agrees and acknowledges that he shall
forfeit any and all rights to any then-unpaid Severance Payments
and, to the greatest extent permitted under applicable law, Mohr
agrees to immediately repay to the Company all Severance Payments
previously paid to Mohr. Notwithstanding the foregoing,
Company’s obligation to Mohr for Severance Payments pursuant
to Section 2(b)(i) above shall cease only if Mohr is
found by a court of law to be in material violation of the
provisions of Section 2 or 3 of the Employment
Agreement.
7
Intentionally omitted.
8
Notices.
Any notice to be given
hereunder shall be deemed sufficient if addressed in writing and
delivered by certified or registered mail to the addresses
listed below :
If to the
Company:
On
Assignment, Inc.
26651 West Agoura
Road
Calabasas, CA
91302
Attn:
General Counsel
If to Mohr, to the
most recent address on file with the Company’s Human
Resources Department; or to such other address as either Party
shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when
actually received by the addressee.
9
Severability. If any term, provision, covenant or
condition of this Agreement is held by a court of competent
jurisdiction to exceed the limitations permitted by applicable law,
as determined by such court in such action, then the provisions
will be deemed reformed to apply to the maximum limitations
permitted by applicable law and the Parties hereby expressly
acknowledge their desire that in such event such action be
taken. Notwithstanding the foregoing, the Parties further
agree that if any term, provision, covenant or condition of this
Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions
shall remain in full force and effect and in no way shall be
affected, impaired or invalidated.
10
Entire Agreement; Amendment. This Agreement, together
with the Release and The SAR Agreements, the surviving provisions
of the Employment Agreement (as provided above), and the
Indemnification Agreement between Mohr and Company dated
January 25, 2007, represent the entire agreement and
understanding among the Parties concerning Mohr’s separation
from the Company and, except as expressly set forth herein,
supersedes and replaces any and all prior agreements and
understandings concerning Mohr’s relationship with the
Company and his compensation from the Company (including, without
limitation, the Employment Agreement, the RSU Agreements, the
Option Agreements,
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