EXHIBIT 10.30.2

 

STOCK OPTION ADDENDUM

 

This Stock Option Addendum (this “Addendum”) is entered into as of August 25,
2003 by and between Exult, Inc. (the “Company”) and Michael J. Salvino
(“Optionee”).

 

In consideration of Optionee’s employment with the Company and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Optionee hereby agree as follows:

 

1. Following an Involuntary Termination that occurs at any time within 180 days
following a Change in Control, and if a Revoking Resolution has not been
adopted, then subject to Section 2, all of the shares of the Company’s capital
stock (or other capital stock or consideration for which Covered Options become
exercisable in connection with the Change in Control) that are at the time of
the Involuntary Termination or thereafter become subject to outstanding Covered
Options or issued upon exercise of Covered Options prior to vesting shall
automatically vest in full on an accelerated basis so that the Covered Options
shall immediately become exercisable for all underlying shares or other
consideration as fully-vested and all shares or other consideration issued upon
exercise of Covered Options prior to vesting will become free of repurchase
rights. The Covered Options shall remain governed by the plan pursuant to which
they were granted, including for purposes of the period for which they will
remain exercisable, except to the extent the plan is modified by a written
agreement between Optionee and the Company. However, notwithstanding the
foregoing, this Addendum will not extend the term or cause vesting of any
Covered Options that have lapsed upon expiration of their initial term before
occurrence of the Involuntary Termination and Change in Control required to
trigger vesting under this Addendum.

 

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

 

3. The benefits provided to Optionee under this Addendum will be subject to
appropriate income tax withholding and other deductions required by applicable
laws or regulations or approved by Optionee, and Optionee will be responsible
for all income taxes (including excise taxes or surtaxes thereon) payable as a
result of receipt of benefits under this Addendum. If the Company or its
successor pays any such taxes, including tax deposits, as a result of the
benefits provided to Optionee under this Addendum, Optionee will upon demand
promptly reimburse the Company or its successor therefor, and the Company may
make exercise of options that vest pursuant to this Addendum contingent upon
arrangements to make payment and reimbursement, as appropriate, of such taxes.

 

4. For purposes of this Addendum, the following definitions apply:

 

“Cause” means (i) Optionee 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) Optionee’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 Optionee was convicted or to which Optionee pled nolo contendere
manifested moral turpitude or fraud by Optionee, or that has a material adverse
effect (including without limitation reputational effect) upon the Company, or
that demonstrates that Optionee is manifestly unfit for a position of leadership
and trust in the Company.

 

“Change in Control” has the meaning set forth at the time thereof in the
Company’s 2000 Equity Incentive Plan or the successor plan thereto, provided
that for purposes hereof the threshold for a Change

 

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in Control resulting from stock accumulation shall be 50% rather than 30%, and
paragraph (i) of the definition of “Change in Control” in the 2000 Equity
Incentive Plan shall accordingly be read to substitute 50% for 30% in each case
therein.

 

“Covered Options” means all options to purchase capital stock of the Company or
its successor issued to Optionee at any time before or after execution of this
Addendum and all options or other securities issued in replacement for such
options, provided that with respect to any stock options originally issued to
Optionee after the date of this Addendum (“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 at the time thereof in the
Company’s 2000 Equity Incentive Plan, or the successor plan thereto.

 

Resignation with “Good Reason” means (i) breach by the Company of Optionee’s
Employment Agreement or any other material legal obligation to Optionee in any
material respect and failure to cure such breach within 15 days of receipt from
Optionee of a written demand for cure delivered to the Company within 60 days
after Optionee became aware of the breach, followed by resignation by Optionee
of Optionee’s employment within 30 days after the end of such 15-day cure
period; or (ii) resignation by Optionee of Optionee’s employment within 30 days
after (A) being directed to relocate Optionee’s primary work location by more
than 50 miles, which relocation would increase Optionee’s commuting distance
over the distance to Optionee’s primary work location before the change,
provided that if Optionee’s costs of relocation are paid outright or reimbursed
under a program of forgiveness over no more than two years following relocation,
and Optionee receives such other accommodations, including income tax gross-up
and any cost-of-living increases, as may be necessary so that the relocation
does not result in any out-of-pocket cost to Optionee or a material adverse
effect on Optionee’s financial position or standard of living, then the
relocation will not permit Optionee to resign with Good Reason; (B) Optionee’s
annual salary is reduced by more than 15% from its level in effect immediately
before the effective time of the Change in Control; (C) Optionee is no longer
provided with an incentive compensation program and benefits substantially
comparable to the incentive compensation program and benefits in effect as of
the beginning of the year in which the Change in Control occurs; or (D) 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 Addendum.

 

“Involuntary Termination” means:

 

(i) Optionee’s involuntary dismissal or discharge by the Company or its
successor under circumstances other than Cause, death or Disability, or

 

(ii) Optionee’s resignation with Good Reason.

 

“Revoking Resolution” means a duly adopted resolution of the Company’s board of
directors, or any committee thereof, specifically declaring that this Addendum
is revoked. A Revoking Resolution may only be adopted before the earlier to
occur of (i) execution and delivery of a definitive binding agreement providing
for a Change in Control that is concurrently or subsequently consummated, and
(ii) a duly adopted resolution of the Company’s board of directors or any
committee thereof authorizing or recommending a Change in Control that is
subsequently consummated. Further, a Revoking Resolution may only be adopted (i)
within 90 days following any event that would constitute Cause for termination
of Optionee’s employment (even if Optionee’s employment is not terminated); (ii)
in connection with and within 90 days following a reduction in Optionee’s title,
compensation, or responsibilities, provided that

 

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reductions in title, compensation, or responsibilities that are commensurate
with similar reductions applicable to management level employees generally will
not serve as the basis for a Revoking Resolution; or (iii) within 90 days
following Optionee’s failure to achieve reasonable documented performance
requirements.

 

5. (a) Optionee acknowledges that the benefits provided by this Addendum are
associated with Optionee’s position in the Company at the time this Addendum is
entered into and Optionee’s anticipated performance, and that changes in that
position or performance failures or acts constituting Cause for termination of
Optionee’s employment may result in revocation of this Addendum through a
Revoking Resolution. Revoking Resolutions are within the discretion of the
Company’s board of directors or any committee thereof, subject to the standards
set forth in the definition of “Revoking Resolution” above, and Optionee will
have no rights under this Addendum following a Revoking Resolution.

 

(b) Except as described in the second sentence of this Section 5(b), this
Addendum supersedes any and all (i) previous agreements or addenda related to
acceleration of option vesting upon a Change in Control or “Corporate
Transaction,” all of which are hereby terminated and of no further force or
effect and (ii) contrary provisions of any plan pursuant to which Covered
Options are granted. However, this Addendum is a supplement to, and not a
limitation of, the rights of Optionee under the plans pursuant to which the
Covered Options were issued, and nothing in this Addendum limits acceleration of
stock options or other benefits provided to Optionee under stock plans of the
Company or separate written agreements entered into by the Company or its
successors on or after the date hereof.

 

(c) This Addendum will supplement but not limit any rights of Optionee to
receive cash severance payments pursuant to any separate severance plan or
agreement.

 

(d) Without limiting the foregoing, if Optionee becomes entitled to the benefits
provided under this Addendum, Section 4.14 of the Company’s 2000 Equity
Incentive Plan, and any similar provisions of any other plan or agreement
otherwise applicable to Optionee or Optionee’s Covered Options, will cease to
apply to, and will in no way affect or confer upon the Company, its successors,
or any other party, any rights against, Optionee or Covered Options.

 

(e) The determination of the Company’s board of directors or its committee,
acting solely within its discretion pursuant to the standards set forth in his
Addendum, regarding whether to adopt a Revoking Resolution will be determinative
for purposes of this Addendum. This Addendum will not apply to any Change in
Control that is effective after the Company’s board of directors or a committee
thereof adopts a Revoking Resolution.

 

6. The prevailing party in disputes hereunder be entitled to recover attorneys’
fees and costs.

 

IN WITNESS WHEREOF, the Company and Optionee have entered into this Addendum as
of the date first above set forth.

 

EXULT, INC.         By:                    

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    James C. Madden, V           Michael J. Salvino     Chief Executive Officer
           

 

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Exhibit A to

Stock Option Addendum

 

Form of Release

 

RELEASE

 

THIS RELEASE (this “Release”) is entered into as of                     , by
Michael J. Salvino (“Optionee”) in consideration of and as a condition to
receipt of benefits under that certain Stock Option Addendum entered into as of
August     , 2003 between Exult, Inc. and Optionee (the “Stock Option
Addendum”). Optionee hereby agrees as follows:

 

1. Condition. Optionee acknowledges and agrees that the benefits provided
pursuant to the Stock Option Addendum are contingent upon effectiveness of this
Release.

 

2. Release.

 

(a) As of the Effective Date, Optionee, for Optionee and for Optionee’s heirs,
executors, administrators, successors and assigns, does hereby fully and forever
release, discharge and acquit Exult, its affiliates and their respective current
and former members, partners, principals, shareholders, directors, officers,
agents, attorneys, predecessors, Optionees 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) Optionee’s employment or retention with
Exult or its affiliates; (ii) the termination of Optionee’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,
Optionee Retirement Income Security Act of 1974, as amended, claims under the
California Labor Code or 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 Optionee for: (A) Optionee’s rights under the Stock Option
Addendum, any other written severance agreement to which Optionee is party, any
written severance plan in which Optionee is entitled to participate, or this
Release; (B) Optionee’s rights, if any, to benefits under Exult’s 401(k) plan or
any other retirement plan that have accrued and vested at the time of
termination of Optionee’s employment; (C) Optionee’s rights, if any, to exercise
stock options granted to Optionee that are vested but not exercised or revoked
pursuant to the applicable stock option plan, and any rights under the stock
option plan pursuant to which vested options were granted; (D) statutory rights
arising solely as a result of Optionee’s ownership of Exult shares and held in
common with other Exult stockholders; or (E) any claim Optionee may make for
unemployment or workers’ compensation benefits.

 

(b) Optionee 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) Optionee 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, Optionee 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

 

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Optionee has or may have with respect to the Released Matters (even if any such
claim is unforeseen as of the date hereof).

 

(d) Optionee represents and warrants that Optionee 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.”

 

Optionee, being aware of Section 1542, hereby expressly waives any and all
rights Optionee 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.

 

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

 

3. No Claims. Optionee represents and warrants that Optionee has not instituted
any complaints, charges, lawsuits or other proceedings against any Released
Parties with any governmental agency, court, arbitration agency or tribunal.
Optionee further agrees that, except to the extent that applicable law prohibits
such agreements, Optionee 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 Optionees or former Optionees 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, Optionee 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 Optionee’s behalf, Optionee 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. Optionee represents and agrees that he or she fully
understands his or her right to discuss, and that Exult has advised Optionee to
discuss, all aspects of this Release with Optionee’s private attorney, that
Optionee has carefully read and fully understands all the provisions of the
Release, that Optionee understands its final and binding effect, that Optionee
is competent to sign this Release and that Optionee is voluntarily entering into
this Release.

 

5. Acknowledgment. Optionee represents and agrees that in executing this Release
Optionee relies solely upon his or her own judgment, belief and knowledge, and
the advice and recommendations of any independently selected counsel, concerning
the nature, extent and duration of Optionee’s rights and claims. Optionee
acknowledges that no other individual has made any promise, representation or
warranty, express or

 

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implied, not contained in this Release, to induce Optionee to execute this
Release. Optionee further acknowledges that Optionee is not executing this
Release in reliance on any promise, representation, or warranty not contained in
this Release.

 

6. Return of Property. Optionee 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 Optionee’s possession or under Optionee’s control.

 

7. Non-Disclosure. Optionee further agrees to keep the terms of this Release
confidential, and that, with the exception of his or her spouse and legal
counsel or as compelled by law, Optionee 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 Optionee’s heirs, executors, administrators,
successors and assigns.

 

9. Arbitration. Optionee 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 Optionee
and Exult. If Optionee 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. Confidential Information and Inventions Agreement. Optionee hereby reaffirms
all of Optionee’s agreements and covenants set forth in that certain
Confidential Information and Inventions Agreement by and between Optionee and
Exult or the Proprietary Information and Inventions Agreement, as applicable.

 

13. Entire Agreement. This Release contains the entire agreement and
understanding between Optionee and Exult regarding the matters set forth herein
and replaces all prior agreements, arrangements and understandings, written or
oral regarding the subject matter hereof, but releases given for consideration
other than benefits under the Stock Option Addendum will not be affected by this
Release. This Release cannot be amended, modified, supplemented, or altered,
except by written amendment or supplement signed by Optionee 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 16(a) applies only to Optionees aged under forty (40). This
Release is effective as of the date first written above (the “Effective Date”).

 

(b) This Section 16(b) applies only to Optionees aged forty (40) and above.

 

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

 

(ii) Optionee understands that he or she is entitled to revoke this Release
within seven (7) days after its execution. The eighth (8th) day after Optionee’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
Optionee delivers written revocation of this Release to Exult’s General Counsel
at 121 Innovation Drive, Suite 200, Irvine, California 92612, facsimile / (949)
856-8802 before the Effective Date, in which case this Release will be of no
force or effect; and

 

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

 

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

 

OPTIONEE  

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Michael J. Salvino

 

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