Exhibit 10.31.2

 

SEVERANCE AGREEMENT

 

This Severance Agreement (this “Agreement”) is entered into as of June 2, 2003
by and between Exult, Inc. (the “Company”) and John A. Adams (“Executive”).

 

Executive has entered into an employment agreement with the Company dated June
2, 2003 (the “Employment Agreement”). In consideration of the Employment
Agreement, the provisions hereof, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Executive hereby agree as follows:

 

1. If a Triggering Event occurs, but subject to Sections 2 and 3:

 

(a) (i) Covered Options that had not vested as of the date of the Triggering
Event but that would have vested if Executive had remained employed with the
Company until the first anniversary of the date of the Triggering Event will
vest and become exercisable as of the date of the Triggering Event; (ii) all
shares previously issued upon exercise of Covered Options prior to vesting that
would have become free of repurchase rights if Executive had remained employed
with the Company until the first anniversary of the date of the Triggering Event
will become free of repurchase rights, as of the date of the Triggering Event,
notwithstanding any unsatisfied vesting conditions applicable thereto; and (iii)
Covered Restricted Stock that had not vested as of the date of the Triggering
Event but that would have vested if Executive had remained employed with the
Company until the first anniversary of the date of the Triggering Event will
vest and become free of contractual restrictions imposed by the Company as of
the date of the Triggering Event (but such shares may continue to be subject to
transfer restrictions or requirements under applicable securities laws or
regulations). The Covered Restricted Stock and Covered Options that accelerate
in accordance with this Section 1(a) will be governed by the Plan pursuant to
which they were granted, including in the case of options for purposes of the
period for which they will remain exercisable, except to the extent the plan is
modified by a written agreement between Executive and the Company. Covered
Options and Covered Restricted Stock that had not vested as of the date of the
Triggering Event and that do not accelerate according to this provision will,
unless otherwise provided by the Stock Option Addendum entered into by Executive
and the Company concurrently herewith, be cancelled.

 

(b) The Company or its successor will pay Executive the Severance Payment in a
lump sum within 15 days after the date of the Triggering Event or, if later, on
the date the condition described in Section 3 is satisfied.

 

(c) If Executive qualifies to continue to receive insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Company will
reimburse Executive for the cost of coverage for Executive and Executive’s
eligible dependents who were covered under Company-sponsored insurance on the
date of notice of the Triggering Event for a period of 365 days after the date
of the Triggering Event under COBRA. The amount of reimbursement shall be equal
to the actual premiums Executive pays.

 

2. (a) If in connection with a Triggering Event not involving any Change in
Control (as defined at the time thereof in the Company’s 2000 Equity Incentive
Plan or the

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successor plan thereto) and not involving any breach by the Company of
Executive’s Employment Agreement or any other material legal obligation to
Executive in any material respect, Executive receives benefits under Section 1
of this Agreement, then within five (5) days of the Triggering Event the
Company’s CEO may specify a list of companies deemed, in the CEO’s reasonable
good-faith judgment, to be engaged or planning to engage in business activities
competitive with the Company (“Listed Companies”). If, without prior written
consent of the Company’s CEO, at any time within 365 days after the Triggering
Event Executive directly or indirectly (i) participates in the ownership,
management, operation or control of, or is employed or contracted by, or
otherwise engaged in any business relationship for Executive’s compensation or
remuneration or investment with, any of the Listed Companies, or (ii) agrees to
do any of the things described in (i), then the Company shall be entitled
without consideration or obligation to Executive to cease payments to Executive
under this Agreement and to recover from Executive any cash payments made to
Executive pursuant to Section 1(b) of this Agreement, and to cancel any stock
options that vested pursuant to Section 1(a) of this Agreement but have not been
exercised, and to rescind any exercise of any stock options that vested pursuant
to Section 1(a) of this Agreement, and to rescind the grant of any shares of
Covered Restricted Stock that vested pursuant to Section 1(a) of this Agreement.
Any restrictions imposed and Company rights under this Section 2(a) will be (or
become) void if the Triggering Event occurs at any time during the period from
60 days before until 548 days after a Change in Control.

 

(b) If at any time before the third anniversary of the Triggering Event
Executive (i) breaches in any material respect any contractual, legal or
fiduciary obligation to the Company, and if such breach is susceptible of cure,
fails to cure such breach within 30 days of the Company’s delivery to Executive
of notice of the breach and demand for cure, or (ii) disparages in any material
respect the Company or any other person or entity included among the “Released
Parties” as defined in Exhibit A, then the Company shall be entitled without
consideration or obligation to Executive to cease payments to Executive under
this Agreement and to recover from Executive any cash payments made to Executive
pursuant to Section 1(b) of this Agreement, and to cancel any stock options that
vested pursuant to Section 1(a) of this Agreement but have not been exercised,
and to rescind any exercise of any stock options that vested pursuant to Section
1(a) of this Agreement, and to rescind the grant of any shares of Covered
Restricted Stock that vested pursuant to Section 1(a) of this Agreement. Any
obligation of the Company to provide benefits to Executive will be suspended
during any applicable cure period.

 

(c) The Company may exercise its rights under this Section 2 in whole or part by
giving Executive written notice at any time or from time to time within 180 days
after becoming aware of the activities described above. Within ten days after
receiving such notice from the Company, Executive shall repay to the Company the
cash payments made to Executive pursuant to Section 1(b) of this Agreement, and
return to the Company all shares of stock Executive received in connection with
any rescinded stock option exercise or any rescinded grant of Covered Restricted
Stock. If Executive has transferred any shares obtained upon exercise of stock
options that have been rescinded or any shares of Covered Restricted Stock,
grant of which has been rescinded, then Executive shall pay to the Company in
cash the gross equivalent fair market value thereof at the time of their
transfer. If Executive returns to the Company shares

 

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obtained upon exercise of stock options pursuant to the foregoing, the Company
will return to Executive the aggregate exercise price Executive paid for the
shares, in the Company’s discretion either by paying Executive cash, or by
reduction of amounts Executive owes the Company. If Executive has transferred
shares obtained upon exercise of stock options and is therefore obligated to pay
the Company the value thereof pursuant to the foregoing, Executive may deduct
from that payment any portion of the aggregate exercise price Executive paid to
the Company for the shares that has not been paid to Executive by the Company in
its discretion either in cash or by reduction of amounts Executive owes the
Company.

 

3. The benefits provided to Executive under this Agreement will in each case be
contingent upon and subject to Executive’s execution and delivery to the
Company, and the effectiveness upon any applicable period of revocability, of a
written release substantially in the form attached hereto as Exhibit A.

 

4. The benefits provided to Executive under this Agreement will be subject to
appropriate income tax withholding and other deductions required by applicable
laws or regulations or approved by Executive, and Executive will be responsible
for all income taxes payable as a result of receipt of benefits under this
letter, without gross-up or other assistance from the Company except as may be
provided by separate written agreement between the Company and Executive.
Notwithstanding anything herein to the contrary, the Company’s obligation to pay
or provide any benefits under this Agreement may be reduced in offset by the
amount of any (i) monetary obligation Executive has to the Company or any of its
Affiliates and/or (ii) liability of the Company or any of its Affiliates to a
third-party as a result of any conduct by Executive that is outside the scope of
Executive’s employment with the Company.

 

5. The following definitions apply for purposes of this Agreement:

 

“Affiliate” of the Company means any person or entity controlling, controlled
by, or under common control with the Company.

 

“Cause” means (i) Executive has engaged in any “Misconduct” as defined at the
time thereof in the Company’s 2000 Equity Incentive Plan or the successor plan
thereto; or (ii) Executive’s conviction of, or plea of nolo contendere to, any
felony or misdemeanor in which the actions forming the basis for the charges for
which Executive was convicted or to which Executive pled nolo contendere
manifested moral turpitude or fraud by Executive; or have a material adverse
effect (including without limitation reputational effect) upon the Company; or
demonstrate that Executive is manifestly unfit for a position of leadership and
trust in the Company, provided that Executive shall not be deemed to have been
terminated for Cause unless and until (1) the Company’s board of directors,
after Executive has had a reasonable opportunity to address the board regarding
the situation and respond to any questions that directors may have with respect
to the alleged grounds for termination, determines that Executive has engaged in
conduct constituting Cause as defined herein; and (2) Executive is given a copy
of certified resolutions, duly adopted by the affirmative vote of at least a
majority of the full membership of the Company’s board of directors, finding
that, in the reasonable good faith opinion of a majority of the board of
directors, Executive has engaged in conduct constituting Cause as defined
herein,

 

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which specify in detail the grounds for termination and indicate that the
grounds for termination have not been cured within the applicable time limits,
if any.

 

“Covered Restricted Stock” means all shares of restricted stock of the Company
or its successor issued to Optionee at any time before or after execution of
this Agreement and all securities issued in replacement for such shares,
provided that with respect to any restricted stock originally issued to Optionee
after the date of this Addendum (“Subsequent Restricted Stock”), the Company may
specify at any time within 30 days before or after the original date of issuance
thereof that such Subsequent Restricted Stock is not Covered Restricted Stock
for purposes hereof.

 

“Covered Options” means all options to purchase capital stock of the Company or
its successor issued to Executive at any time before or after execution of this
Agreement and all options or other securities issued in replacement for such
options, provided that with respect to any stock options originally issued to
Executive after the date of this Agreement (“Subsequent Options”) the Company
may specify at any time within 30 days before or after the original date of
issuance thereof that such Subsequent Options are not Covered Options for
purposes hereof.

 

“Disability” means Permanent Disability as defined in the Company’s 2000 Equity
Incentive Plan, or the successor plan thereto.

 

“Executive Officers” means officers of the Company or its Affiliates in favor of
whom the Company has entered into a severance agreement substantially in the
form hereof.

 

Resignation with “Good Reason” means (i) breach by the Company of Executive’s
Employment Agreement or any other material legal obligation to Executive in any
material respect and failure to cure such breach within 15 days of receipt from
Executive of a written demand for cure delivered to the Company within 60 days
after Executive became aware of the breach, followed by resignation by Executive
of Executive’s employment within 30 days after the end of such 15-day cure
period; or (ii) resignation by Executive of Executive’s employment within 30
days after (A) being directed to relocate Executive’s primary work location by
more than 25 miles, which relocation would increase Executive’s commuting
distance over the distance to Executive’s primary work location before the
change; (B) Executive’s level of responsibility, duties, title or reporting
relationships are diminished in any material way; (C) Executive’s annual salary
is reduced by more than 15% in any 365-day period, or, in any event, below
$425,000; (D) Executive’s bonus or other incentive compensation eligibility or
participation is reduced disproportionately to other Executive Officers, taking
into account relative annual salary levels (provided that non-payment to
Executive of incentive compensation because of Executive’s failure to achieve
reasonable performance milestones consistent with a written incentive
compensation plan that was fairly administered will not constitute Good Reason);
or (E) any successor to the Company or its business fails in any acquisition of
the Company or its business, or any other reorganization or change-in-control
transaction to assume in full all of the obligations of the Company under this
Agreement.

 

“Severance Payment” means an amount equal to the sum of (i) Executive’s annual
salary as in effect on the first day of the fiscal year in which the Triggering
Event occurs or immediately before the Triggering Event, whichever is greater,
plus (ii) Executive’s target bonus

 

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for the year in which the Triggering Event occurs as in effect on the first day
of the fiscal year in which the Triggering Event occurs or immediately before
the Triggering Event, whichever is greater, provided that Executive’s target
bonus for this purpose will in no case be less than 50% of the amount referred
to in part (i) of this definition. For these purposes, non-cash bonus components
will be converted to and paid in their cash equivalent calculated as of the time
of the Triggering Event, but Covered Options and shares of Covered Restricted
Stock that vest in whole or part pursuant to this Agreement will not be
considered non-cash bonus components.

 

“Triggering Event” means the Company or its successor terminates Executive’s
employment under any circumstances other than for Cause, death or Disability; or
Executive resigns Executive’s employment with Good Reason. The date of the
Triggering Event will be the date Executive’s employment terminates.

 

6. (a) This Agreement is intended to function as the “Severance Agreement”
referred to in the Exult, Inc. Executive Severance Plan (the “Severance Plan”)
and is otherwise subject to the provisions of the Severance Plan; provided,
however, that in accordance with Section 5(a) of the Severance Plan, in the
event of any conflict between the provisions of the Severance Plan and this
Agreement, this Agreement will govern. Subject to the preceding sentence and
except as this Agreement may expressly provide otherwise, this Agreement
supersedes any and all (i) previous agreements, plans or addenda related to
severance benefits payable to Executive, all of which are hereby terminated and
of no further force or effect, and (ii) contrary provisions of any plan pursuant
to which Covered Restricted Stock or Covered Options are granted. In addition,
the benefits payable to Executive hereunder are in lieu of any other severance
benefits under any other plan or agreement of the Company implemented or entered
into before the date of this Agreement. However, this Agreement is a supplement
to, and not a limitation of, the rights of Executive under the plans pursuant to
which the Covered Restricted Stock and Covered Options were issued, and nothing
in this Agreement limits acceleration of restricted stock or stock options or
other benefits provided to Executive under stock option plans of the Company or
separate written agreements entered into by the Company on or after the date
hereof.

 

(b) If Executive becomes entitled to the benefits provided under this Agreement,
then Section 4.14 of the Company’s 2000 Equity Incentive Plan, and any similar
provisions of any other plan or agreement otherwise applicable to Executive or
Covered Restricted Stock or Covered Options, will cease to apply in
circumstances described in item (a) of the definition of “Misconduct” in the
2000 Equity Incentive Plan (describing competitive activities), but this will
not limit Section 2(a) of this Agreement.

 

7. Sections 10(b) [Notices], 10(d) [Governing Law; Severability], 10(e)
[Remedies], 10(f) [Arbitration], 10(g) [Waivers; Amendments] and 10(h)
[Counterparts] of the Employment Agreement shall be applicable to this Agreement
as though set forth herein.

 

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In witness whereof, the Company and Executive have entered into this Agreement
as of the date first above set forth.

 

EXULT, INC.    

By:

 

 

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James C. Madden, V

     

John A. Adams

   

President and CEO

       

 

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PLAN AND SUMMARY PLAN DESCRIPTION

 

EXULT, INC.

EXECUTIVE SEVERANCE PLAN

 

1. Defined Terms. Capitalized terms used herein but not defined herein shall
have their defined meaning set forth in the form of Severance Agreement attached
hereto as Exhibit 1.

 

2. Purpose of Plan. Exult, Inc. (“Exult”) has adopted this Executive Severance
Plan (this “Plan”) to provide certain benefits to eligible executives of Exult
whose employment is terminated pursuant to a Triggering Event that occurs after
the Effective Date (as defined herein) of this Plan. This Plan does not alter
the at-will employment relationship Exult maintains with its employees, and the
employment relationship may be terminated at any time with or without cause or
notice.

 

3. Effective Date. The effective date of this Plan is October 31, 2000 (the
“Effective Date”).

 

4. Participants. An executive employee of Exult is eligible to participate in
this Plan (a “Participant”) if the employee and Exult have executed and
delivered a Severance Agreement in the form attached hereto from time to time as
Exhibit 1 (the “Severance Agreement”).

 

5. Benefits.

 

(a) Each Participant who qualifies for benefits under this Plan will receive
cash and non-cash benefits in accordance with and subject to the terms of the
Severance Agreement entered into by and between the Participant and Exult. Each
Severance Agreement entered into by Exult and a Participant states terms of the
Plan for the employee party thereto, and in the case of any conflict between the
Severance Agreement and this Plan, the Severance Agreement will govern.

 

(b) All benefits under this Plan will be paid from the general assets of Exult
and no trust fund, escrow arrangement or other segregated account will be
established. Accordingly, employees entitled to receive benefits under this Plan
will have no priorities over the claims of Exult’s general creditors.

 

6. Employee’s Mailing Address. Each Participant is responsible for notifying the
Plan Administrator of any change of the Participant’s mailing address from the
address on file with Exult’s Human Resources Department on the date of the
Triggering Event. This Plan shall satisfy its obligations to make payment to or
otherwise contact the employee by using regular U.S. mail or other commercial
delivery service

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addressed to the employee at the last address on file with Exult’s Human
Resources Department.

 

7. Amendment and Termination. Exult may terminate or amend this Plan without
prior notice with respect to application of the Plan to persons who are not yet
Participants in the Plan as described in Section 4 at the time of such amendment
or termination, but Exult may not unilaterally effect any amendment or
termination of this Plan or any Severance Agreement with respect to any person
who has become a Participant in the Plan as described in Section 4.

 

8. Administration and Claims Procedure. All interpretations, determinations,
questions, and disputes regarding this Plan and claims by Participants hereunder
(“Claims”), including but not limited to, Claims concerning interpretation,
administration, benefit amounts, eligibility, and definitions, will be initially
and tentatively decided and approved by the Plan Administrator. The “Plan
Administrator” is a Committee appointed by the Board of Directors of Exult and
shall constitute the Named Fiduciary of the Plan. The Committee shall include
the Vice President Human Resources/Chief People Officer. The decision of the
Plan Administrator shall be final and binding on all employees and dependents.
The Plan Administrator may be contacted at Exult, Inc., 4 Park Plaza, Suite
1000, Irvine, CA 92614, Attn:Vice President Human Resources/Chief People
Officer, telephone 949.250.8002.

 

An employee who believes that he or she has not received a Benefit under this
Plan to which the employee believes the employee is entitled, may submit a
written Claim for such Benefit to the Plan Administrator. A Claim must be
presented to the Plan Administrator within ninety (90) days after the employee
knew or should have known of the facts that gave rise to the Claim. Failure to
present a Claim in a timely manner shall be a waiver of the Claim. The Plan
Administrator will respond in writing to a Claim for benefits under this Plan
within ninety (90) days of receipt of the Claim, unless the Plan Administrator
needs additional information, or special circumstances require an extension of
time for processing the Claim, in which case the ninety (90) day period may be
extended by the Plan Administrator to a period of up to one hundred eighty (180)
calendar days from the receipt of the Claim. If the Claim is denied, the Plan
Administrator shall notify the employee with a written explanation of the denial
which shall state (i) the specific reason(s) that the Claim was denied, (ii) the
exact references to the Plan provisions that dealt with the Claim, and (iii) an
explanation of the Plan procedure to have a denied Claim reviewed

 

Within sixty (60) calendar days after an employee receives a denial of the
Claim, the employee may appeal the Claim denial to the Plan Administrator. The
employee or the employee’s authorized representative may make a written request
for a review of the denial and to review applicable documents, and must submit
comments and issues in writing. The Plan Administrator will decide an appeal
within sixty (60) calendar days after receiving the request for review, unless
special circumstances require an extension of time for processing, in which case
the sixty (60) day period may be extended by the Plan Administrator to a period
of up to one hundred twenty (120) calendar days from the

 

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receipt of the request for review. The Plan Administrator shall notify the
employee in writing of any such extension. The Plan Administrator’s decision on
the review shall be in writing and shall include specific reasons for the
decision and references to the Plan provision(s) upon which it was based.

 

None of the process or time requirements set forth herein affect in any way the
time limits set forth in any Severance Agreement. A Triggering Event shall be
deemed to satisfy all requirements under this Plan for submission or
notification of a Claim, without further action by the affected Participant.

 

9. Statement of ERISA Rights. The Employee Retirement Income Security Act of
1974, as amended (“ERISA”), gives Participants certain rights and protection and
imposes certain duties on the persons who administer the Plans, as discussed
below. ERISA provides that all Plan Participants shall be entitled to:

 

(1) Examine, without charge, during normal business hours at the Plan
Administrator’s office, all Plan documents and copies of all documents filed by
the Plan with the U.S. Department of Labor, if any.

 

(2) Obtain copies of all of the Plan documents and other Plan information upon
written request to the Plan Administrator. The Plan Administrator may make a
reasonable charge for copies therefore, and participants should inquire what the
charge will be before requesting copies.

 

In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. Those persons,
called “fiduciaries” of the plan, have a duty to operate the employee benefit
plan prudently and in the interest of Plan Participants and beneficiaries. No
one, including Exult, may fire Participants or otherwise discriminate against
Participants in any way to prevent Participants from obtaining a welfare benefit
under the Plan or from exercising their rights under ERISA.

 

If a Participant has a Claim for a Plan benefit that is denied in whole or in
part, the Participant will be given a written explanation of the reason for the
denial. The Participant has a right to have the claim reviewed and reconsidered.
The Participant may submit a written request for reconsideration to the Plan
Administrator.

 

Under ERISA, there are steps a Participant can take to enforce the above rights.
For instance, if a Participant requests materials from the Plan and does not
receive them within thirty (30) days, the Participant may file suit in a federal
court. In such a case, the court may acquire the Plan Administrator to provide
the materials and pay the Participant up to $100 a day until the Participant
receives the materials, unless the materials were not sent because of reasons
beyond the control of the Plan Administrator. If the Participant has a claim for
benefits that is denied or ignored, in whole or in part, the Participant may
file suit in a state or federal court.

 

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If Plan fiduciaries misuse the Plan’s money, or if a Participant is
discriminated against for asserting his or her rights under ERISA, the
Participant may seek assistance from the U.S. Department of Labor or the
Participant may file suit in a federal court. The court will decide who should
pay court costs and legal fees. If the Participant is successful, the court may
order the person the Participant sued to pay those costs and fees. If the
Participant loses, the court may order the Participant to pay these costs and
fees, for example, if it finds the Participant’s claim is frivolous.

 

If a Participant has any questions about the Plan, the Participant should
contact the Plan Administrator. If a Participant has any questions about this
statement or about his or her rights under ERISA, the Participant should contact
the nearest area office of the U.S. Labor-Management Services Administration,
Department of Labor.

 

10. Plan’s End of Fiscal Year. This Plan’s fiscal year-end is December 31. This
is the date of the end of the year for purposes of maintaining this Plan’s
fiscal records.

 

11. Employer ID Number. 33-0831076. This is Exult’s identification number
assigned by the Internal Revenue Service.

 

12. Agent for Legal Process. Service of legal process may be made upon the
General Counsel of Exult, Inc.

 

13. Exhibits and Schedules. All exhibits and schedules referred to in or
attached to this Plan are integral parts of this Plan as if fully set forth
herein.

 

14. Plan Number. 520.

 

[Remainder of Page Intentionally Left Blank]

 

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EXHIBIT A

 

RELEASE

 

THIS RELEASE (this “Release”) is entered into as of             , by John A.
Adams (“Executive”) in favor of Exult, Inc. (“Exult” or the “Company”) and
certain other parties as set forth herein.

 

Contingent upon Executive’s execution and delivery to the Company of this
Release, the Company is obligated to provide certain benefits to Executive
pursuant to the Exult, Inc. Executive Severance Plan and related Severance
Agreement entered into as of June 2, 2003 by and between Executive and the
Company and that certain Stock Option Addendum entered into as of June 2, 2003
by and between Executive and the Company (the “Severance Arrangements”). In
consideration of the receipt by Executive of benefits pursuant to the Severance
Arrangements, Executive hereby agrees as follows:

 

1. Total Obligation. Executive acknowledges and agrees that the benefits
provided pursuant to the Severance Arrangements, along with the payments listed
on Schedule 1 to this Release for any accrued unpaid vacation, salary and bonus
payments, receipt of which is hereby acknowledged, are the sole and exclusive
amounts which the Company is obligated to pay to Executive, and all other claims
for compensation in any form, including but not limited to commissions, bonuses,
consulting fees and overtime wages are hereby waived. The cash payment portion
of the benefits the Company is obligated to provide to Executive pursuant to the
Severance Arrangements may be reduced in offset by the amount of any monetary
obligation of Executive to the Company or to an affiliate of the Company.

 

2. Release.

 

(a) As of the Effective Date, Executive, for Executive and for Executive’s
heirs, executors, administrators, successors and assigns, does hereby fully and
forever release, discharge and acquit the Company, its affiliates and their
respective current and former members, partners, principals, shareholders,
directors, officers, agents, attorneys, predecessors, employees,
representatives, clients, suppliers, service providers, and contractors and the
successors and assigns of each of them (“Released Parties”), of and from any and
all charges, grievances, complaints, claims, demands, obligations, promises,
agreements, damages, actions, causes of action, suits, rights, costs, losses,
debts, expenses (including attorneys’ fees and costs), liabilities, and
indebtedness, of every type, kind, nature, description or character, whether
known or unknown, suspected or unsuspected, liquidated or unliquidated, arising
out of, relating to or in any way connected with (i) Executive’s employment or
retention with the Company or its affiliates; (ii) the termination of
Executive’s employment or retention; (iii) any violation of local, state or
federal law, including, but not limited to, the Worker Adjustment and Retraining
Notification Act, Older Workers Benefit Protection Act (“OWBPA”), Americans with
Disabilities Act, California Fair Employment & Housing Act, Age Discrimination
in Employment Act of 1967, as amended (“ADEA”), Title VII of the Civil Rights
Act of 1964, as amended, Civil Rights Act of 1866, Rehabilitation Act of 1973,
as amended, Employee Retirement Income Security Act of 1974, as amended, claims
under the California Labor Code or

 

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other comparable state laws; (iv) wrongful termination, breach of the covenant
of good faith and fair dealing, intentional or negligent infliction of emotional
distress, defamation, invasion of privacy, breach of employment contract, fraud
or negligent misrepresentation; and (v) any other event, act or omission arising
on or before the Effective Date (the “Released Matters”). Notwithstanding the
foregoing, the Released Matters shall not include any claims by Executive for:
(A) Executive’s rights under the Severance Arrangements and this Release; (B)
Executive’s rights to benefits under Exult’s 401(k) plan and any other written
plan or written arrangement pursuant to which Executive received benefits that
have accrued and vested as the time of termination of Executive’s employment;
(C) Executive’s rights pursuant to the applicable stock option plan to exercise
stock options granted to Executive that are vested (including without limitation
pursuant to the Severance Arrangements) but not exercised or revoked pursuant to
the applicable stock option plan or the Severance Arrangements, and other rights
of Executive pursuant to the plan pursuant to which such stock options were
granted or written agreements related to such stock options; (D) statutory
rights arising solely as a result of Executive’s ownership of Exult shares and
held in common with other Exult stockholders; (E) any claim Executive may make
for unemployment or workers’ compensation benefits; or (F) rights to defense,
indemnity, and reimbursement pursuant to any written plan or written commitment
of the Company.

 

(b) Executive specifically agrees not to claim, and has waived any right to
claim, to have been under duress in connection with the review, negotiation,
execution and delivery of this Release.

 

(c) Executive acknowledges and agrees that the releases made herein constitute
final and complete releases of the Released Parties with respect to all Released
Matters, and that by signing this Release, Executive is forever giving up the
right to sue or attempt to recover money, damages or any other relief from the
Released Parties for all claims Executive has or may have with respect to the
Released Matters (even if any such claim is unforeseen as of the date hereof).

 

(d) Executive represents and warrants that Executive understands California
Civil Code Section 1542, which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

Executive, being aware of Section 1542, hereby expressly waives any and all
rights Executive may have thereunder as well as under any other statute or
common law principles of similar effect under the laws of any state or the
United States. This Release shall act as a release of all future claims that may
arise from the Released Matters, whether such claims are currently known or
unknown, foreseen or unforeseen including, without limitation, any claims for
damages incurred at any time after the date of this Release resulting from the
acts or omissions which occurred on or before the date of this Release of any of
the Released Parties.

 

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Thus, notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of the Released Parties,
Executive expressly acknowledges that this Release is intended to include in its
effect, without limitation, all Released Matters which Executive does not know
or suspect to exist in his favor at the time of execution hereof, and that this
Release contemplates the extinguishment of all such Released Matters.

 

3. No Claims. Executive represents and warrants that Executive has not
instituted any complaints, charges, lawsuits or other proceedings against any
Released Parties with any governmental agency, court, arbitration agency or
tribunal. Executive further agrees that, except to the extent that applicable
law prohibits such agreements, Executive will not, directly or indirectly, (i)
file, bring, cause to be brought, join or participate in, or provide any
assistance in connection with any complaint, charge, lawsuit or other proceeding
or action against any Released Parties at any time hereafter for any Released
Matters, (ii) assist, encourage, or support employees or former employees or
stockholders or former stockholders of Exult or any of its affiliates in
connection with any lawsuit, charge, claim or action they may initiate, unless
compelled to testify by appropriate civil processes; or (iii) defend any action,
proceeding or suit in whole or in part on the grounds that any or all of the
terms or provisions of this Release are illegal, invalid, not binding,
unenforceable or against public policy. In addition, Executive will refrain from
bringing or dismiss, as applicable, any claim against any third party if any
Released Party would be required to defend or indemnify that third party in
connection with such claim. If any agency or court assumes jurisdiction of any
complaint, charge, or lawsuit against Exult or any Released Party, on
Executive’s behalf, Executive agrees to immediately notify such agency or court,
in writing, of the existence of this Release, including providing a copy of it
and to request, in writing, that such agency or court dismiss the matter with
prejudice.

 

4. Advice of Counsel. Executive represents and agrees that he or she fully
understands his or her right to discuss, and that Exult has advised Executive to
discuss, all aspects of this Release with Executive’s private attorney, that
Executive has carefully read and fully understands all the provisions of the
Release, that Executive understands its final and binding effect, that Executive
is competent to sign this Release and that Executive is voluntarily entering
into this Release.

 

5. Acknowledgment. Executive represents and agrees that in executing this
Release Executive relies solely upon his own judgment, belief and knowledge, and
the advice and recommendations of any independently selected counsel, concerning
the nature, extent and duration of Executive’s rights and claims. Executive
acknowledges that no other individual has made any promise, representation or
warranty, express or implied, not contained in this Release, to induce Executive
to execute this Release. Executive further acknowledges that Executive is not
executing this Release in reliance on any promise, representation, or warranty
not contained in this Release.

 

6. Return of Property. Executive will immediately return all Exult property,
documents, files, records, equipment, instruction manuals and other items
concerning the business of Exult, its parent or subsidiary companies, or any
related entity that are in Executive’s possession or under Executive’s control.

 

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7. Non-Disclosure. Executive shall keep the terms of this Release confidential,
and, with the exception of his spouse and legal counsel or as compelled by law,
Executive will not disclose any information concerning this Release to anyone.

 

8. Binding on Successors and Assigns. This Release shall inure to the benefit of
and be binding upon the successors and assigns of Exult and shall inure to the
benefit of and be binding upon Executive’s heirs, executors, administrators,
successors and assigns.

 

9. Arbitration. Executive acknowledges and agrees that any dispute regarding the
application, interpretation or breach of this Release will be subject to final
and binding arbitration before the American Arbitration Association (“AAA”) (an
entity unaffiliated with Exult which provides arbitration services), which will
be the exclusive remedy for such claim or dispute. Such claim or dispute shall
be resolved by one (1) arbitrator that shall be mutually selected by Executive
and Exult. If Executive and Exult cannot mutually select an arbitrator, the
arbitrator shall be appointed in accordance with the then-existing commercial
arbitration rules of the AAA. Any resolution, opinion or order of the AAA may be
entered as a judgment in any court of competent jurisdiction. This Release shall
be admissible in any proceeding to enforce its terms.

 

10. Severability. If any provision of this Release is found, held, declared,
determined, or deemed by any court of competent jurisdiction to be void,
illegal, invalid or unenforceable under any applicable statute or controlling
law, the legality, validity, and enforceability of the remaining provisions will
not be affected and the illegal, invalid, or unenforceable provision will be
deemed not to be a part of this Release

 

11. Governing Law. This Release shall be construed and interpreted in accordance
with California law.

 

12. Proprietary Information Agreement. Executive hereby reaffirms all of
Executive’s agreements and covenants set forth in that certain Proprietary
Information and Inventions Agreement by and between Executive and Exult.

 

13. Entire Agreement. This Release contains the entire agreement and
understanding between Executive and Exult regarding the matters set forth herein
and replaces all prior agreements, arrangements and understandings, written or
oral regarding the subject matter hereof. This Release cannot be amended,
modified, supplemented, or altered, except by written amendment or supplement
signed by Executive and Exult.

 

14. Counterparts. This Release may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute but one and the
same instrument. Facsimile transmission of this Release and/or retransmission of
any signed facsimile transmission will be deemed the same as delivery of an
original and will be binding for all purposes.

 

15. Review and Effectiveness.

 

(a) This Section 15(a) applies only if Executive is aged under forty (40). This
Release is effective as of the date first written above (the “Effective Date”).

 

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(b) This Section 15(b) applies only if Executive is aged forty (40) and above.

 

(i) Executive acknowledges that prior to signing this Release, Executive was
offered up to forty-five (45) days to consider whether to sign this Release.
Executive further acknowledges receiving the disclosures required under the ADEA
and OWBPA attached hereto.

 

(ii) Executive understands that he or she is entitled to revoke this Release
within seven (7) days after its execution. The eighth (8th) day after
Executive’s execution and delivery of this Release will be the “Effective Date”.
This Release will be effective and enforceable beginning on the Effective Date
unless Executive delivers written revocation of this Release to Exult’s Chief
Executive Officer at 4 Park Plaza, Suite 1000, Irvine, California 92614,
facsimile 949/553-1541 before the Effective Date, in which case this Release
will be of no force or effect; and

 

(iii) Executive acknowledges that Section 4 regarding Executive’s consultation
with his attorney applies, among other things to the ADEA and OWBPA.

 

IN WITNESS WHEREOF, Executive has executed this Release as of the date first
written above.

 

EXECUTIVE

 

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John A. Adams

 

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Schedule 1 to

 

Release

 

Calculate Executive’s accrued unpaid vacation, and any salary and bonus amounts
that are payable. These should be listed on this schedule and paid at the time
of termination.

 

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