Exhibit 10.2

TRANSCEND SERVICES, INC.

EMPLOYEE PROPRIETARY INFORMATION,

INVENTIONS, AND NON-COMPETITION AGREEMENT

In consideration of my employment or continued employment by Transcend Services,
Inc. or any assign or successor in interest (“the Company”) and the compensation
now and hereafter paid to me, I hereby agree as follows:

 

1. DEFINITIONS.

1.1 Intellectual Property Rights. As used herein, the term “Intellectual
Property Rights” means any rights available under patent, copyright, trade
secret or trademark law or any other similar statutory provision or common law
doctrine in the United States or anywhere else in the world.

1.2 Invention. As used herein, the term “Invention” means any invention whether
patentable or not.

1.3 Proprietary Information. As used herein, the term “Proprietary Information”
means confidential or otherwise protectible information, knowledge or data. By
way of illustration but not limitation, “Proprietary Information” includes trade
secrets, Inventions, mask works, ideas, processes, formulas, source and object
codes, data, programs, works of authorship, know-how, improvements, discoveries,
developments, designs and techniques, information regarding plans for research,
development, new products, marketing and selling, business plans, budgets,
salary information and unpublished financial statements, licenses, prices and
costs, and unpublished information regarding suppliers and customers.

1.4 Company Proprietary Information. As used herein, the term “Company
Proprietary Information” means Proprietary Information owned by the Company.

1.5 THIRD PARTY PROPRIETARY INFORMATION. As used herein, the term “Third Party
Proprietary Information” means Proprietary Information owned by a third party.

 

2. COMPANY PROPRIETARY INFORMATION; NONUSE AND NONDISCLOSURE.

2.1 Treatment of Company Proprietary Information. During my employment and
thereafter, I will hold in strictest confidence and will not (i) use any Company
Proprietary Information except in connection with my work for the Company or
(ii) disclose any Company Proprietary Information unless an officer of the
Company expressly authorizes me in writing to make such disclosure. During my
employment with the Company and thereafter, I will obtain the Company’s written
approval before publishing or submitting for publication any material (written,
verbal, or otherwise) that relates to my work at the Company or incorporates or
reveals any Company Proprietary Information.

2.2 TREATMENT OF THIRD PARTY PROPRIETARY INFORMATION. I understand that the
Company has received and in the future may receive Third Party Proprietary
Information

 

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subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the term of
my employment and thereafter, I will hold Third Party Proprietary Information in
strictest confidence and will not use or disclose the same except in connection
with my work for the Company or unless expressly authorized in writing to do so
by an officer of the Company.

2.3 NO IMPROPER USE OF PROPRIETARY INFORMATION OF PRIOR EMPLOYERS AND OTHERS.
During my employment by the Company I will not improperly use or disclose any
Proprietary Information of any former employer or any other person to whom I
have an obligation of confidentiality, and I will not bring onto the premises of
the Company any unpublished documents or other property belonging to any former
employer or other person to whom I have an obligation of confidentiality unless
such former employer or person has previously given me written authorization to
do so. I will use in the performance of my duties only information which is
generally known and used by persons with training and experience comparable to
my own, which is common knowledge in the industry or otherwise legally in the
public domain, or which is otherwise provided or developed by the Company.

2.4 EXCEPTIONS. Notwithstanding the foregoing, I may use or disclose information
which I can demonstrate (a) is generally known in the trade or industry other
than by reason of a wrongful act or omission by me, (b) was in my possession
before I became an employee of the Company as shown by physical documents, (c )
was acquired by me from a third party who has not thereby breached an obligation
to the Company or (d) was not acquired by me as result of a breach of this
Agreement.

 

3. ASSIGNMENT OF RIGHTS TO PROPRIETARY INFORMATION.

3.1 Assignment. Subject to Section 3.7, I hereby assign to the Company all my
right, title and interest in and to any (i) Inventions and (ii) Works of
Authorship that do not constitute works made for hire, created, conceived,
reduced to practice or fixed in a tangible medium of expression by me, either
alone or jointly with others, during the period of my employment with the
Company, together with all Intellectual Property Rights that may exist with
respect thereto. Inventions and Works of Authorship assigned to the Company, or
to a third party as directed by the Company pursuant to this Section, are
hereinafter referred to as “Assigned Inventions and Assigned Works of
Authorship.” Notwithstanding anything to the contrary herein, I will have no
obligation to assign to the Company any Invention or Work of Authorship that I
would otherwise have an obligation to assign pursuant to this Section which
(a) is not related in any manner to any existing or contemplated business of the
Company and (b) I created, conceived, reduced to practice or fixed in a tangible
medium of expression without the use of any resources, equipment, or facilities
of the Company and outside of the Company’s business hours or (c) I did not
create, conceive, reduce to practice, or fix in a tangible medium at the
direction of the Company or as part of my duties as an employee of the Company.

3.2 Obligation to Keep Company Informed. During the period of my employment with
the Company and for six months after termination of my employment, I will
promptly disclose to the Company fully and in writing any Inventions and Works
or Authorship created, conceived, reduced to practice or fixed in a tangible
medium of expression by me, either alone or jointly with others, and required to
be assigned to the Company pursuant to Section 3.1. In addition, I will promptly
disclose to the Company all patent applications filed by me or on my behalf
within a year after termination of employment.

 

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3.3 Government or Third Party. I also agree to assign all my right, title and
interest in and to any particular Invention or Work or Authorship required to be
assigned to the Company pursuant to Section 3.1 to a third party, including
without limitation the United States, as directed in writing by the Company.

3.4 Works for Hire. I acknowledge that, except as stated in Section 3.1, all
original Works of Authorship which are made by me (solely or jointly with
others) within the scope of my employment are “works made for hire” pursuant to
the United States Copyright Act (17 U.S.C. §101 et seq.).

3.5 Enforcement of Intellectual Property Rights. I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Intellectual Property Rights on Assigned Inventions, Assigned Works of
Authorship and works made for hire created, conceived or reduced to practice by
me during the period of my employment with the Company. To that end I will
execute, verify and deliver such documents and perform such other acts
(including appearances as a witness) as the Company may reasonably request for
use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing
such Company Intellectual Property Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Company
Intellectual Property Rights to the Company or its designee. My obligation to
assist the Company with respect to Company Intellectual Property Rights shall
continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after such time for the time actually spent
by me at the Company’s request on such assistance.

3.6 In the event the Company is unable for any reason, after reasonable effort,
to secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Intellectual Property Rights
assigned hereunder to the Company.

3.7 Prior Inventions. Any Inventions I made prior to the commencement of my
employment with the Company (“Prior Inventions”) are excluded from the scope of
this Agreement. To preclude any possible uncertainty, I have set forth on
Exhibit A (Prior Inventions) attached hereto a complete list of all Inventions
that I have, alone or jointly with others, conceived, developed or reduced to
practice prior to the commencement of my employment with the Company, that I
consider to be my property or the property of third parties and that I wish to
have excluded from the scope of this Agreement. If disclosure of any such Prior
Invention would cause me to violate any prior confidentiality agreement, I
understand that I am not to list such Prior Invention in Exhibit A but am only
to disclose a cursory name for each such Invention, a listing of the party(ies)
to whom it belongs and the fact that full disclosure as to such Inventions has
not been made for that reason. A space is provided on Exhibit A for such
purpose. If no such disclosure is attached, I represent that there are no Prior
Inventions. If, in the course of my employment with the Company, I incorporate a
Prior Invention into a Company product, process or machine, I hereby grant the
Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license
(with rights to sublicense through multiple tiers of sublicensees) to make, have
made, modify, use and sell such Prior Invention. Notwithstanding the foregoing,
I agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company

 

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Inventions without the Company’s prior written consent.

 

4. NON-COMPETITION.

4.1 I agree that during the period of my employment by the Company and for a
period of one year thereafter, I will not, without the express written consent
of the Company, enter, engage in, participate in, or assist, either as an
individual on my own or as a partner, joint venturer, employee, agent,
consultant, officer, trustee, director, owner, part-owner, shareholder, or in
any other capacity, in the United States of America, directly or indirectly, any
other business organization whose activities or products are competitive with
the activities or products of the Company then existing or then under
development up to and including my employment termination date with the Company.
Nothing in this Agreement shall prohibit me, after termination of my employment
with the Company, from working for an employer who is engaged in activities or
offers products that are competitive with the activities and products of the
Company so long as I do not work for or with the department, division, or group
in that employer’s organization that is engaging in such activities or
developing such products.

4.2 I recognize that these restrictions on competition are reasonable because of
the Company’s investment in goodwill, its customer lists, and other proprietary
information and my knowledge of the Company’s business and business plans. If
any period of time or geographical area should be judged unreasonable in any
judicial proceeding, then the period of time or geographical area shall be
reduced to such extent as may be deemed required so as to be reasonable and
enforceable.

4.3 Nothing in this Agreement shall preclude me from making passive investments
of not more than two percent (2%) of a class securities of any business
enterprise registered under the Securities Exchange Act of 1934, as amended.

[***CALIFORNIA ONLY***] Section 16600 of the California Business and Professions
Code currently provides that every contract by which anyone is restrained from
engaging in a lawful profession, trade, or business of any kind is to that
extent void and as a result this Section 4 shall not apply to you as long as you
are a resident of California.

 

5. RECORDS.

5.1 I agree to keep and maintain adequate and current records (in the form of
notes, sketches, drawings and in any other form that may be required by the
Company) of all Proprietary Information developed by me and all Inventions made
by me during the period of my employment at the Company and required to be
assigned to the Company pursuant to Section 3.2, which records shall be
available to and remain the sole property of the Company at all times.

 

6. ADDITIONAL ACTIVITIES.

6.1 I agree that during the period of my employment by the Company I will not,

 

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without the Company’s express written consent, engage in any employment or
business activity that is competitive with, or would otherwise conflict with, my
employment by the Company. I agree that for the period of my employment by the
Company and for one (l) year after the date of termination of my employment with
the Company, I will not solicit any business that is competitive with the
Company from any client or customer of the Company (other than on behalf of the
Company) as of the date of my termination of employment with the Company. I
agree that I will not, either in my individual capacity or on behalf of or
through any other entity, either directly or indirectly, hire, engage, recruit
or participate in any way in the hiring, engagement or recruitment of, or
participate in any effort to hire or solicit, any current or future employees of
the Company or any subsidiary thereof during the period of my employment with
the Company and for a period of one (1) year from the date of termination of my
employment with the Company, without the prior written consent of the Company.

 

7. NO CONFLICTING OBLIGATIONS.

7.1 I represent that my performance of all the terms of this Agreement and as an
employee of the Company does not and will not breach any agreement to keep in
confidence information acquired by me in confidence or in trust prior to my
employment by the Company. I have not entered into, and I agree I will not enter
into, any agreement either written or oral in conflict herewith.

 

8. RETURN OF COMPANY PROPERTY.

8.1 When I leave the employ of the Company, I will deliver to the Company any
and all Company property and any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company’s premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or without
notice. Prior to leaving, I will cooperate with the Company in completing and
signing the Company’s termination statement. I hereby authorize the Company to
deduct from any of my accrued wages and/or vacation pay an amount equal to the
Net Book Value of any property or equipment of the Company that I fail to return
to the Company by the date of my termination. Net Book Value as used herein
shall mean the cost to the Company of the property or equipment minus the
accumulated depreciation as of the date of my termination.

 

9. LEGAL AND EQUITABLE REMEDIES.

9.1 Because my services are personal and unique and because I may have access to
and become acquainted with the Proprietary Information of the Company, the
Company shall have the right to enforce this Agreement and any of its provisions
by injunction, specific performance or other equitable relief, without bond and
without prejudice to any other rights and remedies that the Company may have for
a breach of this Agreement.

 

10. NOTICES.

 

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10.1 Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days after the date of mailing.

 

11. NOTIFICATION OF NEW EMPLOYER.

11.1 In the event that I leave the employ of the Company, I hereby consent to
the Company, at its discretion, giving notice to my new employer of my rights
and obligations under this Agreement, but the failure of the Company to give
such notice shall not limit my obligations under this Agreement.

 

12. GENERAL PROVISIONS.

12.1 Governing Law; Exclusive Venue and Forum; Consent to Personal Jurisdiction.
This Agreement will be governed by and construed according to the laws of the
Commonwealth of Massachusetts, as such laws are applied to agreements entered
into and to be performed entirely within Massachusetts between Massachusetts
residents, without regard to its conflict of laws provisions. The exclusive
venues and forums for any actions arising from this Agreement shall be the
federal and state courts in the Commonwealth of Massachusetts, and both parties
irrevocably consent to personal jurisdiction in such courts for any such
actions.

12.2 Severability. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. If moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.

12.3 Successors and Assigns. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

12.4 Survival. The provisions of this Agreement shall survive the termination of
my employment and the assignment of this Agreement by the Company to any
successor in interest or other assignee.

12.5 Employment. I agree and understand that nothing in this Agreement shall
confer any right with respect to continuation of employment by the Company, nor
shall it affect in any way my right or the Company’s right to terminate my
employment at any time, with or without cause.

12.6 Consulting. The obligations pursuant to Sections 2 and 3 of this Agreement
shall apply to any time during which I was previously engaged, or am in the
future engaged, by the Company as a consultant if no other agreement governs
nondisclosure, assignment of

 

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inventions, or non-competition during such period.

12.7 Waiver. No waiver by the Company of any breach of this Agreement shall be a
waiver of any preceding or succeeding breach. No waiver by the Company of any
right under this Agreement shall be construed as a waiver of any other right.
The Company shall not be required to give notice to enforce strict adherence to
all terms of this Agreement.

12.8 Entire Agreement. This Agreement is the final, complete and exclusive
agreement of the parties with respect to the subject matter hereof and
supersedes and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing and signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.

 

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LOGO [g310420ex-1.jpg]

TRANSCEND SERVICES, INC.

EMPLOYEE PROPRIETARY INFORMATION,

INVENTIONS, AND NON-COMPETITION AGREEMENT

This Agreement shall be effective as of the first day of my employment with the
Company, namely:                                     .

(Date of hire)                            

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY
FILLED OUT EXHIBIT A TO THIS AGREEMENT.

 

   Dated:    Signature:    (Printed Name)
                                                                        
(Address)                                          
                                       Accepted and Agreed to:    Transcend
Services, Inc.                                                            
                                                         By:    Title:    Date:
   Signature:

 

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EXHIBIT A

 

   TO:    TRANSCEND SERVICES, INC.       FROM:   

 

      DATE:   

 

  

SUBJECT: Previous Inventions

1. Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
Transcend Services, Inc. (“the Company”) that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:

¨        No inventions or improvements.

¨        See below:

 

                             

 

                             

 

                             

¨        Additional sheets attached.

2. Due to a prior confidentiality agreement, I cannot complete the disclosure
under Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect to
which I owe to the following party(ies):

 

  Invention or Improvement    Party(ies)    Relationship 1.         2.        
3.        

¨        Additional sheets attached.

 

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