Document:

Exhibit 10.1

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT (this “Agreement”)
is made as of June 2, 2003, between On Assignment, Inc., a Delaware corporation
(the “Company”),  and Dr. Joseph A. Peterson (the “Executive”).

 

Recitals

 

A.                                   Pursuant to the terms
of that certain offer letter dated June 18, 2001 (as same may have been amended
from time to time, the “Offer Letter”), the Executive has been employed by the
Company, on at-will basis, as Chief Executive Officer of the Company.

 

B.                                     By the terms of
the Offer Letter, the Company agreed to provide the Executive with certain
severance payments and benefits in the event the Executive was terminated
without cause within 18 months of his start date, on December 18, 2002 (except
in the case of a change of control, in which case the Executive receives the
severance payments and benefits as provided in the Company’s existing Change of
Control Severance Plan).

 

C.                                     Since December 18,
2002, the Executive has not had a severance arrangement in place other than in
respect of a change of control transaction, and the Company and the Executive
desire now, by the execution of this Severance Agreement, to agree upon the
terms and conditions of such a severance arrangement.

 

Agreement

 

In consideration of the foregoing and the mutual covenants and promises
contained herein, the parties agree as follows:

 

1.                                      Termination.

 

(a)                                  Events
of Termination.  The Executive’s
employment with the Company shall cease upon the first of the following events
to occur:

 

(i)                                    The
Executive’s death.

 

(ii)                                The
Executive’s voluntary retirement at age 65 or older.

 

(iii)                            The
Executive’s disability, which means his incapacity due to physical or mental
illness such that he is unable to perform the essential functions of his
previously assigned duties where (1) such incapacity has been determined to
exist by either (x) the Company’s disability insurance carrier or (y) by the
concurring opinions of two licensed physicians (one selected by the Company and
one by the Executive), and (2) the Board has determined, based

 

 

on competent
medical advice, that such incapacity will continue for such period of time of
at least six continuous months and that it would have a material adverse effect
on the Company.

 

(iv)                               Termination by the
Company by the delivery to the Executive of a written notice from the Board
that the Executive has been terminated (“Notice
of Termination”) with or without Cause. “Cause” shall mean:

 

(A)                               The Executive’s (aa)
conviction of a felony or a crime involving moral turpitude or his commission
of any other act or omission involving dishonesty or fraud with respect to the
Company or any of its Subsidiaries or any of their customers or suppliers or
involving harassment or discrimination with respect to any of the Company’s
employees, (bb) misappropriation of funds or assets of the Company for personal
use or (cc) engaging in any conduct tending to bring the Company or any of its
Subsidiaries into public disgrace or disrepute.

 

(B)                               The Executive’s
continued substantial and repeated neglect of his duties, after written notice
from the Board, and such failure has not been cured within thirty (30) days
after the Executive receives notice thereof from the Board;

 

(C)                               The Executive’s gross
negligence or willful misconduct in the performance of his duties hereunder,
after written notice from the Board, and such failure has not been cured within
thirty (30) days after the Executive receives notice thereof from the Board; or

 

(D)                               The Executive’s engaging
in conduct constituting a breach of Sections 2 or 3 hereof.

 

The Executive must be notified in writing (which writing shall specify
the cause in reasonable detail) of any termination of his employment for
Cause.  The Executive will then have the
right, within ten (10) days of receipt of such notice, to file a written
request for review by the Company.  In
such case, the Executive will be given the opportunity to be heard, personally
or by counsel, by the Board and a majority of the Directors must thereafter
confirm that such termination is for Cause.

 

(v)                                   The Executive’s
voluntary resignation by the delivery to the Board of a written notice from the
Executive that the Executive has resigned.

 

(b)                                  Rights
on Termination.

 

(i)                                    In the event that
Executive’s employment is terminated by the Company without Cause, the Company
will continue, for a period of eighteen (18) months commencing on the effective
date of the termination (the “Severance
Period”), to pay Executive a monthly or bi-weekly portion of the
Annual Base Salary on regular salary payment dates.  The Company will also pay Executive, on the same monthly or
bi-weekly basis over the term of the Severance Period, an amount in the
aggregate equal to any bonus earned by Executive in respect

 

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of the prior
fiscal year, pro-rated from the first day of the current fiscal year through
the date of termination.  During the
Severance Period, the Company will also pay for Executive’s existing Company
insurance coverage.  The payments of
Annual Base Salary, pro-rated bonus and insurance premiums in accordance with
this Section 1(b)(i) are collectively referred to as “Severance Payments”. This Section
1(b)(i) shall not apply unless the Company and Executive have executed a
mutual release in a form mutually acceptable to both the Company and Executive
and is subject to paragraph (d) below. 
Further, notwithstanding the foregoing, the Company’s obligation to the
Executive for Severance Payments or other rights under this Section 1(b)(i)
above shall cease if the Executive is in violation of the provisions of Section
3 below.

 

(ii)                                If the Company
terminates Executive’s employment for Cause, or if Executive resigns, the
Company’s obligations to pay any compensation or benefits under this Agreement
will cease effective the date of termination. 
The Executive’s right to receive any other benefits will be determined
under the provisions of the applicable plans, programs or other coverages.

 

(iii)                            If the Executive dies or is
disabled (as defined in Section 1(a)(iii)), then the Executive or his
estate shall be entitled to any disability income or life insurance payments
from any insurance policies (other than any “key man” life insurance policy)
paid for by the Company.  In addition,
if such death or disability occurs while Executive is employed hereunder, for a
period of six (6) months commencing on the date of such death or such
disability is established, Executive or his estate shall be entitled to payment
of his monthly or bi-weekly portion of the Annual Base Salary on regular salary
payment dates.

 

(iv)                               Until
such time as the Executive has received all of his Severance Payments, subject
to paragraph (d) below, he will be entitled to continue to receive any
health, life, accident and disability insurance benefits provided by the Company
to the Executive under this Agreement.

 

(c)                                  Parachute
Limitations.  Notwithstanding
any other provision of this Agreement or of any other agreement, contract or
understanding heretofore or hereafter entered into by the Executive with the
Company or any Subsidiary or Affiliate thereof, except an agreement, contract
or understanding hereafter entered into that expressly modifies or excludes
application of this Section 1(c) (the “Other
Agreements”), and notwithstanding any formal or informal plan or
other arrangement heretofore or hereafter adopted by the Company (or any
Subsidiary or Affiliate thereof) for the direct or indirect compensation of the
Executive (including groups or classes of participants or beneficiaries of
which the Executive is a member), whether or not such compensation is deferred,
is in cash, or is in the form of a benefit to or for the Executive (a “Benefit Plan”), if the Executive is a
“disqualified individual” (as defined in Section 280G(c) of the Internal
Revenue Code of 1986, as amended (the “Code”)),
the Executive shall not have any right to receive any payment or benefit under
this Agreement, any Other Agreement or any Benefit Plan (i) to the extent that
such payment or benefit, taking into account all other rights, payments or benefits
to or for the Executive under this Agreement, all Other Agreements and all
Benefit Plans,

 

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would cause
any payment or benefit to the Executive under this Agreement, any Other
Agreement or any Benefit Plan to be considered a “parachute payment” within the
meaning of Section 280G(b)(2) of the Code as then in effect (a “Parachute Payment”) and (ii) if, as a
result of receiving a Parachute Payment, the aggregate after-tax amount
received by the Executive under this Agreement, all Other Agreements and all
Benefit Plans would be less than the maximum after-tax amount that could be
received by the Executive without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt of any such
payment or benefit under this Agreement, any Other Agreement or any Benefit
Plan would cause the Executive to be considered to have received a Parachute
Payment that would have the adverse after-tax effect described in clause (ii) of
the preceding sentence, then the Executive shall have the right, in the
Executive’s sole discretion, to designate those rights, payments or benefits
under this Agreement, any Other Agreement and any Benefit Plan that should be
reduced or eliminated so as to avoid having the payment or benefit to the
Executive under this Agreement be deemed to be a Parachute Payment.

 

(d)                                  Mitigation.  The Company’s obligation to continue to provide the Executive
with the Severance Payments pursuant to paragraph (b)(i) above the
benefits pursuant to the second sentence of paragraph (b)(iii)
above shall cease if the Executive becomes employed by a third party and/or
becomes eligible to participate in benefits substantially similar to those
provided under this Agreement as a result of the Executive’s subsequent
employment during the period that the Executive is entitled to receive
Severance Payments.

 

(e)                                  Liquidated
Damages.  The parties
acknowledge and agree that damages which will result to the Executive for
termination by the Company without Cause shall be extremely difficult or
impossible to establish or prove, and agree that the Severance Payments shall
constitute liquidated damages for any breach of this Agreement by the Company
through the Date of Termination. The Executive agrees that, except for such
other payments and benefits to which the Executive may be entitled as expressly
provided by the terms of this Agreement or any applicable Benefit Plan, such
liquidated damages shall be in lieu of all other claims that the Executive may
make by reason of termination of his employment or any such breach of this
Agreement and that, as a condition to receiving the Severance Payments, the
Executive will execute a release of claims in a form reasonably satisfactory to
the Company.

 

2.                                      Confidential
Information; Proprietary Information, etc.

 

(a)                                  Obligation
to Maintain Confidentiality. 
The Executive acknowledges that any Proprietary Information disclosed or
made available to the Executive or obtained, observed or known by the Executive
as a direct or indirect consequence of his employment with or performance of
services  for the Company or any of its
Affiliates during the course of his performance of services for, or employment
with, any of the foregoing Persons (whether or not compensated for such
services) and during the period in which the Executive is receiving Severance
Payments, are the property of the Company and its Affiliates. Therefore, the
Executive agrees that he will not at any time (whether during or after the
Executive’s term of employment) disclose or permit to be disclosed to any
Person or, directly or indirectly, utilize for

 

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his own
account or permit to be utilized by any Person any Proprietary Information or
Records for any reason whatsoever without the Board’s consent, unless and to
the extent that (except as otherwise provided in the definition of Proprietary
Information) the aforementioned matters become generally known to and available
for use by the public other than as a direct or indirect result of the
Executive’s acts or omissions to act. The Executive agrees to deliver to the
Company at the termination of his employment, as a condition to receipt of the
next or final payment of compensation, or at any other time the Company may
request in writing (whether during or after the Executive’s term of
employment), all Records which he may then possess or have under his control.
The Executive further agrees that any property situated on the Company’s or its
Affiliates’ premises and owned by the Company or its Affiliates, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company or its Affiliates and their personnel at any time with
or without notice. Nothing in this Section 2(a) shall be construed to
prevent the Executive from using his general knowledge and experience in future
employment so long as the Executive complies with this Section 2(a) and
the other restrictions contained in this Agreement.

 

(b)                                  Ownership
of Property.  The Executive
acknowledges that all inventions, innovations, improvements, developments,
methods, processes, programs, designs, analyses, drawings, reports and all
similar or related information (whether or not patentable) that relate to the
Company’s or any of its Affiliates’ actual or anticipated business, research
and development, or existing or future products or services and that are
conceived, developed, contributed to, made, or reduced to practice by the
Executive (either solely or jointly with others) while employed by the Company
or any of its Affiliates (including any of the foregoing that constitutes any
Proprietary Information or Records ) (“Work
Product”) belong to the Company or such Affiliate and the Executive
hereby assigns, and agrees to assign, all of the above Work  Product to the Company or such Affiliate.
Any copyrightable work prepared in whole or in part by the Executive in the
course of his work for any of the foregoing entities shall be deemed a “Work
made for hire” under the copyright laws, and the Company or such Affiliate
shall own all rights therein. To the extent that any such copyrightable work is
not a “work made for hire,” the Executive hereby assigns and agrees to assign
to Company or such Affiliate all right, title and interest, including without
limitation, copyright in and to such copyrightable work. The Executive shall
promptly disclose such Work Product and copyrightable work. The Executive shall
promptly disclose such Work Product and copyrightable work to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Executive’s term of employment) to establish and confirm the Company’s or
its Affiliate’s ownership (including, without limitation, execution of
assignments, consents, powers of attorney and other instruments).  Notwithstanding anything contained in this Section
2(b)  to the contrary, the Company’s
ownership of Work Product does not apply to any invention that the Executive
develops entirely on his own time without using the equipment, supplies or
facilities of the Company or its Affiliates or Subsidiaries or any Proprietary
Information (including trade secrets), except that the Company’s ownership of
Work Product does include those inventions that: (a) relate to the business of
the Company or its Affiliates or Subsidiaries or to the actual or demonstrably
anticipated research or development relating to the Company’s business; or (b)
result from any work that the Executive performs for the Company or its Affiliates
or Subsidiaries.

 

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(c)                                  Third
Party Information.  The
Executive understands that the Company and its Affiliates will receive from
third parties confidential or proprietary information (“Third Party Information”) subject to a
duty on the Company’s and its Affiliates’ part to maintain the confidentiality
of such information and to use it only for certain limited purposes. During the
term of the Executive’s employment and thereafter, and without in any way limiting
the provisions of  Sections 2(a)
and 2(b) above, the Executive shall hold Third Party Information in the
strictest confidence and shall not disclose to anyone (other than personnel of
the Company or its Affiliates who need to know such information in connection
with their work for the Company or its Affiliates) or use, except in connection
with his work for the Company or its Affiliates, Third Party Information unless
expressly authorized by a member of the Board in writing.

 

(d)                                  Use
of Information of Prior Employers, etc..  The Executive will abide by any enforceable obligations contained
in any agreements that the Executive has entered into with his prior employers
or other parties to whom the Executive has an obligation of confidentiality.

 

(e)                                  Compelled
Disclosure.  If the Executive is
required by law or governmental regulation or by subpoena or other valid legal
process to disclose any Proprietary Information or Third Party Information to
any Person, the Executive will immediately provide the Company with written
notice of the applicable law, regulation or process so that the Company may
seek a protective order or other appropriate remedy.  The Executive will cooperate fully with the Company and the
Company’s Representatives in any attempt by the Company to obtain any such
protective order or other remedy.  If
the Company elects not to seek, or is unsuccessful in obtaining, any such
protective order or other remedy in connection with any requirement that the Executive
disclose Proprietary Information or Third Party Information, and if the
Executive furnishes the Company with a written opinion of reputable legal
counsel acceptable to the Company confirming that the disclosure of such
Proprietary Information or Third Party Information is legally required, then
the Executive may disclose such Proprietary Information or Third Party
Information to the extent legally required; provided,
however, that the Executive will use his reasonable best efforts to
ensure that such Proprietary Information is treated confidentially by each
Person to whom it is disclosed.

 

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3.                                      Noncompetition
and Nonsolicitation.

 

(a)                                  Noncompetition.  As long as the Executive is an employee of
the Company or any Affiliate thereof, and for a period extending for eighteen
(18) months following the date of termination (the “Noncompete Period”), the Executive shall not, directly or
indirectly own, manage, control, participate in, consult with, render services
for, or in any manner engage in any business similar to or competing with the
business of the Company in the temporary science, clinical lab support and
healthcare staffing industries within any geographic area (including the
entirety of the United States, Canada and the United Kingdom) in which the
Company or its Subsidiaries is conducting business or has conducted business
during the Noncompete Period.

 

(b)                                  Nonsolicitation.  As long as the Executive is an employee of
the Company or any Affiliate thereof, and for eighteen (18) months thereafter
(i.e., during the Non-Compete Period), the Executive shall not directly or
indirectly through another entity: (i) induce or attempt to induce any employee
of the Company or any Affiliate to leave the employ of the Company or such
Affiliate, or in any way interfere with the relationship between the Company or
any Affiliate and any employee thereof; (ii) hire or employ any person who was
an employee of the Company or any Affiliate at any time during the nine (9)
month period immediately preceding the date of such Executive’s termination;
(iii) induce or attempt to induce any customer, client, supplier, licensee or
other business relation of the Company or any Affiliate to cease doing business
with the Company or such Affiliate, or in any way interfere with the
relationship between any such customer, client, supplier, licensee or business
relation and the Company or any Affiliate; (iv) call on, solicit or service any
Person who was a customer or client of the Company or any Affiliate or (v) call
on, solicit or service any Person who was Prospective Client for any purpose
which directly or indirectly competes with the business of the Company.  For purposes hereof, a “Prospective Client” means any Person whom
the Company or any of its Affiliates has entertained discussions with to become
a client or customer at any time during the twelve (12) month period
immediately preceding the date of such Executive’s termination.

 

(c)                                  Acknowledgment.  The Executive acknowledges that in the
course of his employment with the Company and its Affiliates, he has and will
become familiar with the trade secrets and other Proprietary Information of the
Company and its Affiliates.  The
Executive further acknowledges that as the Chief Executive Officer of the
Company, the Executive has and will have direct or indirect responsibility,
oversight or duties with respect to all of the businesses of the Company and
its Subsidiaries and its and their current and prospective employees, vendors,
customers, clients and other business relations, and that, accordingly, the
geographical restriction contained in this Section 3 is reasonable in
all respects and necessary to protect the goodwill and Proprietary Information
of the Company and that without such protection the Company’s customer and client
relations and competitive advantage would be materially adversely
affected.  It is specifically recognized
by the Executive that his services to the Company and its Subsidiaries are
special, unique and of extraordinary value, that the Company has a protectable
interest in prohibiting the Executive as provided in this Section 3,
that money damages are insufficient to protect such interests, that there is
adequate consideration being

 

7

 

provided to
the Executive hereunder that such prohibitions are necessary and appropriate
without regard to payments being made to the Executive hereunder and that the
Company would not enter this Agreement with the Executive without the
restriction of this Section 3. 
The Executive further acknowledges that the restrictions contained in
this Section 3 do not impose an undue hardship on him and, since he has
general business skills which may be used in industries other than that in
which the Company and its Subsidiaries conduct their business, do not deprive
the Executive of his livelihood.  The
Executive further acknowledges that the provisions of this Section 3 are
separate and independent of the other sections of this Agreement.

 

(d)                                  Enforcement, etc.  If, at the time of enforcement of Section
2 or 3 of this Agreement, a court holds that the restrictions stated
herein are unreasonable under circumstances then existing, the parties hereto
agree that the maximum duration, scope or geographical area reasonable under
such circumstances as determined by the court shall be substituted for the
stated period, scope or area.  Because
the Executive’s services are unique because the Executive has access to
Proprietary Information and for the other reasons set forth herein, the parties
hereto agree that money damages would be an inadequate remedy for any breach of
this Agreement.  Therefore, without
limiting the generality of Section 6(g), in the event of a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security).

 

(e)                                  Submission to Jurisdiction.  The parties hereby: (i) submit to the
jurisdiction of any state or federal court sitting in California in any action
or proceeding arising out of or relating to Section 2 and/or 3 of
this Agreement; (ii) agree that all claims in respect of such action or
proceeding may be heard or determined in any such court; and (iii) agree not to
bring any action or proceeding arising out of or relating to Section 2
and/or 3 of this Agreement in any other court.  The parties hereby waive any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect
thereto.  The parties hereby agree that
a final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law.

 

GENERAL PROVISIONS

 

4.                                      Definitions.

 

“Affiliate” means,
with respect to any particular Person, any other Person controlling, controlled
by or under common control with such particular Person.

 

“Board” means the
Board of Directors of the Company.

 

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“Person” means an
individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.

 

“Proprietary Information”
means any and all data and information concerning the business affairs of the
Company or any of its Affiliates and not generally known in the industry in
which the Company or any of its Affiliates is or may become engaged, and any
other information concerning any matters affecting or relating to the Company’s
or its Affiliates businesses, but in any event Proprietary Information shall
include, any of the Company’s and its Affiliates’ past, present or prospective
business opportunities, including information concerning acquisition
opportunities in or reasonably related to the Company’s or its Affiliates
businesses or industries, customers, customer lists, clients, client lists, the
prices the Company and its Affiliates obtain or have obtained from the sale of,
or at which they sell or have sold, their products, unit volume of sales to
past or present customers and clients, or any other information concerning the
business of the Company and its Affiliates, their manner of operation, their
plans, processes, figures, sales figures, projections, estimates, tax records,
personnel history, accounting procedures, promotions, supply sources,
contracts, know-how, trade secrets, information relating to research,
development, inventions, technology, manufacture, purchasing, engineering,
marketing, merchandising or selling, or other data without regard to whether
all of the foregoing matters will be deemed confidential, material or
important.  Proprietary Information does
not include any information which the Executive has obtained from a Person
other than an employee of the Company, which was disclosed to him without a
breach of a duty of confidentiality.

 

“Records” means (i)
any and all procedure manuals, books, records and accounts; (ii) all property
of the Company and its Affiliates, including papers, note books, tapes and
similar repositories containing Proprietary Information; (iii) all invoices and
commission reports; (iv) customer lists – partial and/or complete; (v) data
layouts, magnetic tape layouts, diskette layouts, etc.; (vi) samples; (vii)
promotional letters, brochures and advertising materials; (viii) displays and
display materials; (ix) correspondence and old or current proposals to any
former, present or prospective customer of the Company and its Affiliates; (x)
information concerning revenues and profitability and any other financial
conditions of the Company and its Affiliates; (xi) information concerning the
Company and its Affiliates which was input by the Executive or at his
direction, under his supervision or with his knowledge, including on any floppy
disk, diskette, cassette or similar device used in, or in connection with, any
computer, recording devices or typewriter; (xii) data, account information or
other matters furnished by customers of the Company and its Affiliates; and
(xiii) all copies of any of the foregoing data, documents or devices whether in
the form of carbon copies, photo copies, copies of floppy disks, diskettes,
tapes or in any other manner whatsoever.

 

“Subsidiary” means
any corporation of which the Company owns securities having a majority of the
ordinary voting power in electing the board of directors directly or through
one or more subsidiaries.

 

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5.                                      Notices.  Any notice provided for in this Agreement must be in writing and
must be either personally delivered or sent by reputable overnight courier
service (charges prepaid) to the recipient at the address below indicated:

 

If to the Company:

 

On Assignment, Inc.

26651 West Agoura Road

Calabasas, CA 91302

Attention:   Compensation
Committee of the Board of Directors

Tel:   (818) 878-7900

Fax:  (818) 880-0056

 

with a copy to:

 

Hogan & Hartson L.L.P.

555 13th Street, N.W.

Washington, D.C.20004

Attention:   J. Hovey Kemp

Tel:    (202) 637-5623

Fax:   (202) 637-5910

 

If to the Executive:

 

On Assignment, Inc.

26651 West Agour Road

Calabasas, CA 91302

Attention:   Dr. Joseph A.
Peterson

Tel:    (818) 878-7900

Fax:   (818) 880-0056

 

 

or such other
address or to the attention of such other person as the recipient party shall
have specified by prior written notice to the sending party.  Any notice under this Agreement will be
deemed to have been given when so delivered or sent or, if mailed, five (5)
days after deposit in the U.S. mail.

 

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6.                                      General
Provisions.

 

(a)                                  Relationship
with Change of Control Severance Plan. 
It is acknowledged that the Executive is entitled to the benefits of
the Company’s Change in Control Severance Plan with an effective date of
February 12, 1998, as amended (the “ASGN
Severance Plan”).  The
Severance Payments and benefits provided to Executive under this Agreement are
not meant to be duplicative of the severance payments, rights and benefits
provided to Executive under the ASGN Severance Plan.  To the extent that Executive is entitled to both the Severance
Payments hereunder and the severance payments under the ASGN Severance Plan, he
shall only be entitled to either this Agreement’s or the ASGN’s Severance Plan’s
severance payments and benefits, whichever provides the greater amount or
benefit, but not both.

 

(b)                                  Transfers
in Violation of Agreement.  Any
Transfer or attempted Transfer of any Executive Stock in violation of any
provision of this Agreement shall be void, and the Company shall not record
such Transfer on its books or treat any purported transferee of such Executive
Stock as the owner of such stock for any purpose.

 

(c)                                  Severability.  Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

(d)                                  Complete
Agreement.  This Agreement,
those documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.

 

(e)                                  Counterparts:
Facsimile Transmission.  This
Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement. Each party to this Agreement agrees that it will be bound by its own
telecopied signature and that it accepts the telecopied signature of each other
party to this Agreement.

 

(f)                                    Successors
and Assigns.  Except as
otherwise provided herein, this Agreement shall bind and inure to the benefit
of and be enforceable by the Executive and the Company and their respective
successors and assigns (including subsequent holders of Executive Stock); provided that the rights and obligations
of the Executive under this Agreement shall not be assignable and, provided  further
that, the rights and obligations of the Company may be assigned to
any Affiliate of the Company.

 

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(g)                                 Choice
of Law: Jurisdiction. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits hereto will be
governed by and construed in accordance with the internal laws of the State of
Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Delaware.  The parties
hereby:  (i)  submit to the jurisdiction of any state or federal court sitting
in California in any action or proceeding arising out of or relating to
Agreement; (ii) agree that all claims in respect of such action or proceeding
may be heard or determined in any such court; and (iii) agree not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court.  The Executive hereby waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety or other security that might be required of
any other party with respect thereto. 
The parties hereby agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in and other manner provided by law.

 

(h)                                 Remedies.  Each of the parties to this Agreement
will be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including attorney’s fees) caused by any breach of
any provision of this Agreement and to exercise all other rights existing in
its favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.

 

(i)                                    Amendment
and Waiver.  The provisions of
this Agreement may be amended or and waived only with the prior written consent
of the Company and the Executive.

 

(j)                                    Business
Days.  If any time period for
giving notice or taking action hereunder expires on a day which is a Saturday,
Sunday or holiday in the state in which the Company’s chief executive office is
located, the time period shall be automatically extended to the business day
immediately following, such Saturday, Sunday or holiday.

 

(k)                                Termination.  This Agreement shall survive the
termination of the Executive’s employment with the Company and shall remain in
full force and effect after such termination.

 

(l)                                    No
Waiver.  A waiver by any party
hereto of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which such party would otherwise have
on any future occasion.  No failure to
exercise nor any delay in exercising on the part of any party hereto, any
right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are not exclusive
of any rights or remedies provided by law.

 

12

 

(m)                              Insurance.  The
Company, at its discretion, may apply for and procure in its own name for its
own benefit life and/or disability insurance on the Executive in any amount or
amounts considered available.  The
Executive agrees to cooperate in any medical or other examination, supply any
information, and to execute and deliver any applications or other instruments
in writing as may be reasonably necessary to obtain and constitute such
insurance. The Executive hereby represents that he has no reason to believe
that his life is not insurable at rates now prevailing for healthy men of his
age.

 

(n)                                 Offset.  Whenever
the Company or any of its Subsidiaries is obligated to pay any sum to the
Executive or any Affiliate or related person thereof pursuant to this
Agreement, any bona fide debts that the Executive or such Affiliate or related
person owes to the Company or any of its Subsidiaries may be deducted from that
sum before payment.

 

(o)                                  Indemnification
and Reimbursement of Payments on Behalf of the Executive.  The
Company and its Subsidiaries shall be entitled to deduct or withhold from any
amounts owing from the Company or any of its Subsidiaries to the Executive any
federal, state, provincial, local or foreign withholding taxes, excise taxes,
or employment  taxes (“Taxes”) imposed with respect to the Executive’s
compensation or other payments from the Company or any of its Subsidiaries or
the Executive ownership interest in the Company, including, but not limited to,
wages, bonuses, dividends, the receipt or exercise of stock options and/or the
receipt or vesting of restricted stock.

 

 

[THIS
SPACE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

13

 

IN WITNESS WHEREOF,  the parties hereto have executed this
Agreement on the date first written above.

 

 

	
   

  	
   

  	
  On Assignment, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Ron Rudolph

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  RON RUDOLPH

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  EXEC. V.P. & CFO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Joseph A. Peterson

  	
   

  
	
   

  	
   

  	
  Dr. Joseph A. Peterson

  

 

14Exhibit 10.43

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as
of the 21st  day of January, 2003 by and
between Inamed Corporation, a Delaware corporation (the “Corporation”), and
Robert S.Vaters (the “Executive”) (collectively, the “Parties”).  The Parties, intending to be legally bound,
agree as follows:

 

1.       DEFINITIONS. 
In addition to certain terms defined elsewhere in this Agreement, the
following terms shall have the following respective meanings:

 

1.1 “Affiliate” shall mean any Person controlling,
controlled by or under common control with, the Corporation.

 

1.2 
“Base Salary”
shall mean the salary provided for in Section 2.4 of this Agreement.

 

1.3 
“Board”
shall mean the Board of Directors of the Corporation.

 

1.4 
“Cause”
shall mean that the Executive:

 

(a)     has been convicted of any felony or any
crime involving fraud, theft, embezzlement, dishonesty or moral turpitude;

 

(b)     has engaged in conduct which is materially
injurious to the Corporation or its Affiliates, or any of their respective
customer or supplier relationships, financially or otherwise;

 

(c)     has substantially and repeatedly failed to
perform his duties as required under Section 2  after being provided with written notice of the manner in which
he has failed to perform his duties and after being provided thirty (30) days
opportunity to remedy such failure; or

 

(d)     in carrying out his duties under this
Agreement, has engaged in acts or omissions constituting gross negligence or
willful misconduct resulting, in either case, in material harm to the
Corporation.

 

1.5 
“Change in Control” shall be deemed to have occurred if:

 

(a)           Any “person”, as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (other than the Corporation, any trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation,
or any corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership of stock
of the Corporation), becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing fifty-one percent (51%) or more of the combined voting
power of the Corporation’s then outstanding securities; provided, however,
that a change in the proportion of Appaloosa

 

 

Management, L.P’s
ownership of stock of the Corporation shall not constitute a Change in Control
under this Subsection 1.5(a);

 

(b)           During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director(s) designated by a person
who has entered into an agreement with the Corporation to effect a transaction
described in clause (a), (c) or (d) of this subsection) whose election by the
Board or nomination for election by the Corporation’s stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;

 

(c)           The stockholders of the Corporation
approve a merger or consolidation of the Corporation with any other
corporation, other than

 

(i)            a merger or consolidation which
would result in the voting securities of the Corporation outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
(50%) of the combined voting power of the voting securities of the Corporation
or such surviving entity outstanding immediately after such merger or
consolidation or

 

(ii)           a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no “person “ (as defined above) acquires more than twenty percent (20%)
of the combined voting power of the Corporation’s then outstanding securities;
or

 

(d)           the stockholders of the Corporation
approve an agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation’s assets.

 

1.6 
“Corporation Property” shall mean all items and materials provided by the
Corporation to the Executive, or to which the Executive has access, in the
course of his employment, including, without limitation, all files, records,
documents, drawings, specifications, memoranda, notes, reports, manuals,
equipment, computer disks, videotapes, drawings, blueprints and other documents
and similar items relating to the Corporation, its Affiliates or their
respective customers, whether prepared by the Executive or others, and any and
all copies, abstracts and summaries thereof.

 

1.7 
“Competition”
shall mean any direct or indirect research on, or development, production,
marketing, leasing or selling of, any product, process or service which is the
same as, similar to, or in competition with, any line of business or research
in which the

 

2

 

Corporation or any
Affiliate is now engaged or hereinafter engages during Executive’s employment.

 

1.8 
“Confidential Information” shall mean all nonpublic and/or proprietary
information and trade secrets respecting the business of the Corporation or any
Affiliate, including, without limitation, its products, programs, projects,
promotions, marketing plans and strategies, business plans or practices,
business operations, employees, research and development, intellectual
property, software, databases, trademarks, pricing information and accounting
and financing data.  Confidential
Information also includes information concerning the Corporation’s or any
Affiliate’s customers or clients, such as their identity, address or any other
information kept by the Corporation or any Affiliate concerning its customers
whether or not such information has been reduced to documentary form.  Confidential Information does not include
information that is, or becomes, available to the public unless such
availability occurs through an unauthorized act on the part of the Executive.  In the course of his employment hereunder,
the Executive shall not be provided with confidential information concerning
Appaloosa Management, L.P., and no such information shall be deemed to be
Confidential Information under this Agreement.

 

1.9 
“Disability”
shall mean a physical or mental incapacity that has prevented the Executive
from performing the essential functions of his position with the Corporation
for a period of one hundred eighty (180) days as determined (a) in accordance
with any long-term disability plan provided by the Corporation of which the Executive
is a participant, or (b) by the following procedure:  The Executive agrees to submit to medical examinations by a
licensed healthcare professional selected by the Corporation, in its sole
discretion, to determine whether a Disability exists.  In addition, the Executive may submit to the Corporation
documentation of a Disability, or lack thereof, from a licensed healthcare
professional of his choice.  Following a
determination of a Disability or lack of Disability by the Corporation’s or the
Executive’s licensed healthcare professional, the other Party may submit
subsequent documentation relating to the existence of a Disability from a
licensed healthcare professional selected by such other Party.  In the event that the medical opinions of
such licensed healthcare professionals conflict, such licensed healthcare
professionals shall appoint a third licensed healthcare professional to examine
the Executive, and the opinion of such third licensed healthcare professional
shall be dispositive.

 

1.10 
“Good Reason”
shall mean and exist if, without the Executive’s prior written consent, one or
more of the following events occurs:

 

(a)           the Executive is excluded from
participation in any employee benefit plan or program offered to other
similarly ranked executives of the Corporation or his benefits under such plans
or programs are materially reduced;

 

3

 

(b)           during the initial three-year term of
this Agreement only, the Executive is asked to relocate to a location other
than one in either Santa Barbara County, Ca., or Ventura County, Ca.; or

 

(c)           within 12 months following a Change
in Control, the Executive is asked to relocate to a location other than one in
either Santa Barbara, County, Ca. or Ventura County, Ca.; or

 

(d)           the Corporation fails to reimburse
the Executive for business expenses in accordance with the Corporation’s
policies, procedures or practices;

 

(e)           there is a material diminution in the
Executive’s title, authority, duties, orresponsibilities, provided, however,
that none of the foregoing shall constitute Good Reason if:

 

(i)            the Executive gives the Corporation
timely notice of his intent to terminate for Good Reason and the Corporation
cures or remedies the reasons cited by the Executive in said notice within
thirty (30) days of receipt of said notice, or

 

(ii)           sixty (60) days or more have passed
between the Executive learning of the event(s) constituting Good Reason and the
Executive’s giving notice that he is terminating his employment for Good Reason.

 

1.11 
“Person”
shall mean any individual, firm, partnership, association, trust, company,
corporation or other entity.

 

1.12 “Severance Period” 
shall mean the period of time for which Base Salary payments are made to
the Executive following termination pursuant to sections 6.3 and 7.2 of this
Agreement.

 

2.       SERVICES,
COMPENSATION, AND TERM

 

2.1 
Title and Duties.  Corporation
agrees to employ Executive as Executive Vice President, Chief Financial Officer
and Executive agrees to undertake the duties of  that position (hereinafter referred to as “Services”).  Executive shall perform the duties
customarily performed by one holding such position in similar business.  Executive shall also render such other
duties as may be assigned to him from time to time consistent with his title
and duties as Executive Vice President, Chief Financial Officer. Executive will
report directly to the President of the Corporation.

 

2.2 
Best Efforts.  Executive will serve
Corporation faithfully under the direction of its CEO/President and Board of
Directors.  Executive shall devote his
full time and best efforts to performing the Services.  Executive shall act at all times in
accordance with what he reasonably believes is in the best interest of  the Corporation to the best of his ability,
experience, and talents.  Executive
shall devote his time, energy, and skills solely to the business and interests
of Inamed Corporation; provided however, that the

 

4

 

Executive may serve on one
board of for profit companies subject to Board of Directors consent and may
engage in reasonable charitable, civic and political activities.

 

2.3 Corporate Authority. 
Executive will comply with the Corporation’s corporate policies and
procedures.

 

2.4  Compensation.  As
Executive’s compensation for the Services, Corporation will pay Executive the
compensation set forth in the offer letter dated  July 29, 2002 ($300,000.00 plus target bonus of 50%) and  attached as Exhibit A.

 

2.5 
Stock Options.  The Corporation shall grant
to the Executive options (the “Options”) to purchase 150,000 shares of
the Corporation’s common stock.  Subject
to the terms and conditions of the corporation’s Option Agreement and the offer
letter dated July 29, 2002. In the event of any conflict between this agreement
and the Option agreement, this Agreement shall prevail.

 

2.6 
Lock-Up Agreements.  The
Executive will execute any other documents reasonably required by the
Corporation in connection with the Options, including, without limitation, any
reasonable lock-up or similar agreements required by the Corporation’s
underwriters in connection with any offering of the Corporation’s securities.

 

2.7 
Term.  This agreement shall be effective on August
20th, 2002 (the “Effective Date”), and shall continue for a period of
three (3) years from the Effective Date; provided, however, that
this Agreement shall be extended automatically at the end of the initial term
for a one (1) year term and thereafter for successive one (1) year terms if
neither Party has advised the other in writing in accordance with Subsection
8.1 at least sixty (60) days prior to the end of the then current term that
such term will not be extended for an additional one (1) year term.  The initial three (3) year term and each
successive one (1) year term (if any) shall be referred to herein as the “Term
of Employment”.

 

3.       DUTY OF
LOYALTY.

 

3.1 
Executive’s Position of Trust.  As a result
of the Executive’s employment, the Executive will have access to Confidential
Information.

 

3.2 
Obligations During the Term.  The
Executive agrees that during the Term of Employment he shall diligently devote
his time and efforts to the duties and responsibilities assigned to his by the
Corporation, and without prior express written authorization of the Board, the
Executive shall not, directly or indirectly, either alone or in concert with
others, engage in any of the following activities:

 

(a)           Perform or render any services of a
business, professional or commercial nature, relating to services or products
competitive with the Corporation, to or for the benefit of himself or any other
person or entity, whether for compensation or otherwise, except for personal
investments and other activities approved by the Corporation;

 

5

 

(b)           Engage in any activity directly or
indirectly in competition with or adverse to the Corporation;

 

(c)           Engage in any activity for purpose of
influencing or attempting to influence the Corporation’s customers, either directly
or indirectly, to conduct business with any business enterprise in competition
with the Corporation; or

 

(d)           Undertake or participate in any
planning for or organization of any business activity that is or will be in
competition with the Corporation in any field(s) or area(s) in which the
Executive has worked or with which the Executive has come into contact, or of
which the Executive has gained knowledge during the Term of Employment.

 

3.3 
Post-Employment Obligations.  As a
condition of the Executive’s having access to Confidential Information, and in
consideration of the payments and benefits provided hereunder, the Executive
agrees that for a period of twelve (12) months after termination of his
employment, or for the duration of a Severance Period, whichever is greater,
regardless of the reason, the Executive will not, directly or indirectly,
either for himself or for any other person or entity, whether as an agent,
consultant, employee, officer, director, investor, partner, shareholder, proprietor
or in any other individual or representative capacity (excluding the holding
for investment of less that five percent (5%) of the outstanding securities of
any corporation which are regularly traded on a recognized stock exchange), do
any of the following:

 

(a)  the Executive will not undertake any
employment or activity wherein the loyal and complete fulfillment of the duties
of that employment or activity would call upon the Executive to make judgments
on or otherwise to use any Confidential Information that is covered by this
Agreement or the Intellectual Property and Confidentiality Agreement.

 

(b)  Divert or take away (or attempt to divert or
take away), any of the Corporation’s present, former or prospective customers,
including, but not limited to, those upon whom he called, met with or became
acquainted with while engaged as an employee of the Corporation;

 

(c)  Interfere with the contractual or business
relationships of the Corporation;

 

(d)  Solicit or attempt to solicit any employees
or clients of the Corporation; or

 

(e)  Slander or disparage the Corporation, or
undertake any activity which adversely impacts, or is reasonably likely to
impact, the goodwill of the Corporation and its business opportunities.

 

The Parties agree that
Article 5 of Exhibit B hereto (as identified in Section 4 below) shall
apply only during the Term of Employment and for a period of twelve (12) months
thereafter.

 

6

 

3.4 
Corporation Property.  The
Executive agrees that upon termination of his employment by the Corporation for
any reason, or at such earlier time as the Corporation may request, the
Executive shall forthwith return to the Corporation all documents and other
property in his possession belonging to the Corporation or any of its
Affiliates.

 

3.5 
Severability.  Each of the covenants of this
section shall be construed as separate covenant covering the subject matter in
each of the separate counties and states in the United States and governmental
subdivisions outside of the United States (collectively, the “Governmental
Units”).  To the extent that any
covenant is determined by a court of competent jurisdiction to be unenforceable
in any one or more of said Governmental Units, said covenant  shall not be affected with respect to any
other Governmental Unit, each covenant with respect to each Governmental Unit
being construed as severable and independent.

 

4.       INTELLECTUAL
PROPERTY AND CONFIDENTIALITY AGREEMENT.

 

The Executive has
executed or will concurrently herewith execute the Corporation’s Intellectual
Property and Confidentiality Agreement in the form that is attached hereto as
Exhibit B, the terms of which are incorporated herein by reference.  Nothing in Article 3 of Exhibit B shall
prohibit the Executive from removing any Corporation Property from the premises
of the Corporation to the extent necessary in the course of the Executive’s
performance of his duties hereunder and/or for other legitimate purposes of the
Corporation.  In addition, the Parties
agree that the definition of “Company” in Article 8 of Exhibit B shall not
include Appaloosa Management, L.P. or any interest it has in any entity outside
of the Corporation and its consolidated group.

 

5.       TERMINATION.

 

5.1 
Grounds.  This Agreement, and the Executive’s
employment hereunder, shall terminate upon the occurrence of any of the
following events:

 

(a)                                  Termination by the Corporation for Cause. 
By the Corporation immediately for Cause;

 

(b)                                 Termination by
the Corporation without Cause or by the Executive with Good Reason and
no Change in Control.  By the Corporation without
Cause, upon thirty (30) days’ prior written notice to the Executive;

 

(c)                                  Disability.  In the event
of the Executive’s Disability;

 

(d)                                 Death.  Upon the
death of the Executive;

 

(e)                                  Termination by
the Corporation Without Cause or by the Executive with Good Reason After
a Change in Control.  By the Corporation without
cause or by the Executive for Good Reason within twelve (12) months following a
Change in Control.

 

(f)                                    Expiration of
the Term of this Agreement following the Corporation’s election not to
extend pursuant to Section 2.7.

 

7

 

6.       TERMINATION
PAYMENTS.

 

6.1 
Termination Due to Death or Disability. 
In the event of a termination due to the Executive’s death or
Disability, the Executive or his estate, as the case may be, shall be entitled,
in lieu of any other compensation whatsoever, to:

 

(a)  payment of his Base Salary at the rate in
effect at the time of his termination until the date of death or Disability;

 

(b)  any annual bonus awarded but not yet paid;

 

(c)  any annual bonus that would have been
payable with respect to the year of termination in the absence of the
Executive’s death or Disability, pro-rated for the period the Executive worked
prior to his death or Disability, provided that the Executive worked at least
six (6) months in the year for which the annual bonus is payable;

 

(d)  any deferred compensation or bonuses,
including interest or other credits on the deferred amounts, to the extent
provided in the plans or programs providing for deferral;

 

(e)  reimbursement of expenses incurred but not
paid prior to such termination of employment; and

 

(f)  such rights to other benefits as may be
provided in applicable plans and programs of the Corporation, including,
without limitation, applicable employee benefit plans and programs, according
to the terms and provisions of such plans and programs.

 

6. 2 
Termination for Cause.  In the event
that the Corporation terminates the Executive’s employment for Cause, the
Executive shall be entitled, in lieu of any other compensation and benefits
whatsoever, to:

 

(a)  payment of his Base Salary at the rate in
effect at the time of his termination through the date of termination of employment;

 

(b)  any deferred compensation or bonuses,
including interest or other credit on the deferred amounts, to the extent
provided in the plans or programs providing for deferral; and

 

(c)  such rights to other benefits as may be
provided in applicable plans and programs of the Corporation, including,
without limitation, applicable employee benefit plans and programs, according
to the terms and conditions of such plans and programs.

 

8

 

6.3 
Termination Without Cause, by Executive with Good Reason, or Following
Election by the Corporation not to Extend Term. 
In the event that (1) the Corporation terminates the Executive’s
employment hereunder without Cause, (2) the Executive terminates his employment
for Good Reason (in the absence of a Change in Control); or (3) this Agreement
expires following the Corporation’s election not to extend pursuant to Section
2.7, the Executive shall be entitled to the following payments and benefits:

 

(a)  payment of his Base Salary in effect at the
time of termination for a period of twenty four (24) months if terminated
during the initial three-year term of this Agreement, and twelve (12) months if
terminated thereafter, which shall be paid out in equal bi-weekly installments
through the Corporation’s regular payroll practices;

 

(b)  any annual bonus awarded but not yet paid;

 

(c)  any annual bonus that would have been
payable with respect to the year of termination, pro-rated for the period the
Executive worked prior to such termination, provided that the Executive worked
at least six (6) months in the year for which the annual bonus is payable;

 

(d)  any deferred compensation or bonuses,
including interest or other credits on the deferred amounts, to the extent
provided in the plans or programs providing for deferral; 

 

(e)  reimbursement of expenses incurred but not
paid prior to such termination of employment; and

 

(f)  continuation of participation in the
Corporation’s group medical, dental and life insurance plans according to the
terms and provisions of such plans and programs during the Post-Employment
Period for up to twelve (12) months or until the date on which the Executive
first becomes eligible for substantially equivalent insurance coverage provided
by any other entity following termination of employment by the Corporation,
whichever occurs first.

 

6.4 
Termination by Executive Without Good Reason. 
In the event that the Executive terminates his employment without good
reason, the Executive shall be entitled, in lieu of any other compensation and
benefits whatsoever, to:

 

(a)  payment of his Base Salary at the rate in
effect at the time of his termination through the date of termination of
employment;

 

(b)  any deferred compensation or bonuses,
including interest or other credit on the deferred amounts, to the extent
provided in the plans or programs providing for deferral; and

 

(c)  such rights to other benefits as may be
provided in applicable plans and programs of the Corporation, including,
without limitation, applicable employee 

 

9

 

benefit plans and
programs, according to the terms and conditions of such plans and programs.

 

6.5 
Non-Duplication of Benefit. 
Notwithstanding the foregoing, nothing in this Agreement shall result in
a duplication of payments or benefits provided under this Section 6, nor
shall anything in this Agreement require the Corporation to make any payment or
to provide any benefit to the Executive that the Corporation is otherwise required
to provide under any other contract, agreement or arrangement.

 

6.6 
General Release.  No payments
or benefits payable to the Executive upon the termination of his employment
pursuant to this Section 6 shall be made to the Executive unless and until he
executes a general release in a form satisfactory to the Corporation and such
general release becomes effective pursuant to its terms.

 

7.       CHANGE IN
CONTROL.

 

7.1 
Vesting of Stock Options.  In the event
of a Change in Control, all stock options granted by the Corporation to the
Executive shall immediately vest.

 

7.2 
Termination by the Corporation Without Cause or by the Executive for Good Reason
After a Change in Control.  If within
twelve (12) months following a Change in Control, the Executive’s employment is
terminated by the Corporation without Cause or by the Executive for Good
Reason, the Executive shall be entitled, in lieu of any other compensation and
benefits whatsoever under Section 6 or otherwise, to:

 

(a)  payment of his Base Salary at the rate in
effect at the time of his termination through the date of termination of
employment;

 

(b)  an amount equal to the greater of (i) two
(2) times his annual Base Salary at the time of the Change in Control or
(ii) two (2) times his annual Base Salary at the time of the termination
of his employment, which shall be paid out in equal bi-weekly installments
through the Corporation’s regular payroll practices;

 

(c)  any annual bonus awarded but not yet paid or
any other incentive compensation plan;

 

(d)  reimbursement of expenses incurred but not
paid prior to such termination of employment; and

 

(e)  continuation of participation in the
Corporation’s group medical, dental and life insurance plans according to the
terms and provisions of such plans and programs during the Post-Employment
Period for up to eighteen (18) months or until the date on which the Executive
first becomes eligible for substantially equivalent insurance coverage provided
by any other entity following termination of employment by the Corporation.

 

10

 

7.4 
Adjustment to Total Payments.  If any
payment or right accruing to the Executive under this Agreement (without
application of this section), either alone or together with other payments or
rights accruing to the Executive from the Corporation or an Affiliate (“Total
Payments”) would constitute a “parachute payment,” as defined in Section
280G of the Code and regulations thereunder, such payment or right shall be
reduced to the largest amount or greatest right that will result in no portion
of the amount payable or right accruing under this Agreement being subject to
an excise tax under Section 4999 of the Code or being disallowed as a deduction
under Section 280G of the Code.  The
Executive shall cooperate in good faith with the Corporation in providing the
necessary information for making a determination of the applicability of
Section 280G.  The foregoing provisions
of this section shall apply only if after reduction for any applicable federal
excise tax imposed by Section 4999 of the Code and federal income tax imposed
by the Code, the Total Payments accruing to the Executive would be less than
the amount of the Total Payments as reduced, if applicable, and after reduction
for only federal income taxes.

 

8.       MISCELLANEOUS.

 

8.1 
Notices.  Any written notice required or permitted to
be given shall be deemed delivered either when personally delivered or when
mailed, registered or certified, postage prepaid with return receipt requested,
if to the Executive, addressed to the last residence address of the Executive
as shown in the records of the Corporation, and if to the Corporation,
addressed to the Chairman of the Board at its principal office in Santa
Barbara, California.  Mailed notices
shall be deemed received two (2) business days after the date of deposit in the
mail.

 

8.2 
Remedies.

 

8.2.1  Equitable Remedies.  The
Executive acknowledges and agrees any breach, violation or evasion of the
terms, conditions and provisions of Sections 3 and 4 above, will result in
immediate and irreparable injury and harm to the Corporation and shall entitle
the Corporation to injunctive relief, as well as to all other legal or
equitable remedies to which the Corporation may be entitled.

 

8.2.2  Cessation/Reimbursement of Payments. 
If the Executive violates any provision of Sections 3 or 4, the
Corporation may, upon giving written notice to the Executive, immediately cease
all payments and benefits that it may be providing to the Executive pursuant to
this Agreement, and the Executive may be required to reimburse the Corporation
for any payments received from, and the cash value of any benefits provided by,
the Corporation between the first day of the violation and the date such notice
is given; provided, however, that the foregoing shall be in addition to such
other remedies as may be available to the Corporation and shall not be deemed
to permit the Executive to forego or waive such payments in order to avoid his
obligations under Sections 3 or 4.

 

11

 

8.3 
Partial Invalidity.  If any term
or provision of this Agreement or the application thereof to any person or
circumstance shall be held to be invalid or unenforceable to any extent, the
remainder of this Agreement or application of such term or provision to persons
or circumstances other than those to which it is held invalid or unenforceable
shall not be affected thereby, and each term and provision of the Agreement
shall be valid and be enforced to the fullest extent permitted by law.

 

8.4 
Waiver.  No waiver of any right hereunder shall be
effective for any purpose unless in writing, signed by the Party hereto
possessing said right, nor shall any waiver be construed to be a waiver of any
subsequent right, term or provision of this Agreement.

 

8.5 
Assignment; Effect on Agreement.  It is hereby
acknowledged and agreed that the Executive’s rights and obligations under this
Agreement are personal in nature and shall not be assigned or delegated.  This Agreement shall be binding on and inure
to the benefit of the heirs, personal representatives, successors and assigns
of the Parties, subject, however, to the restrictions on assignment and
delegation contained herein.

 

8.6 
Disputes Resolution and Arbitration.

 

8.7.1  Any dispute arising in connection with the
interpretation or enforcement of the provisions of this Agreement, or its
application or validity, will be submitted to arbitration.  Such arbitration proceedings shall be instituted
in Santa Barbara, California, in accordance with the rules then existing of the
American Arbitration Association.  This
agreement to arbitrate is specifically enforceable.

 

8.7.2  Any award rendered in any such arbitration
proceeding will be final and binding on each of the Parties, and judgment may
be entered thereon in any court of competent jurisdiction.  The arbitrator shall have the authority to
compel the Party that does not substantially prevail in such proceeding to pay
the reasonable costs and fees of the prevailing Party (including reasonable and
customary legal fees and expenses) to the extent that the arbitrator deems
appropriate.

 

8.7 
Exhibits.         The terms and conditions of this
Agreement shall prevail in the case of any discrepancy or conflict between such
terms and conditions and the terms and conditions of any exhibit hereto.

 

8.8 
Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of
California.

 

8.9 
Entire Agreement.  Unless
expressly provided to the contrary herein, this Agreement (and the exhibits
attached hereto) contains the entire agreement and understanding between the
Parties and supersedes all prior agreements and understandings, oral or
written.  No modification or termination
shall be valid unless in writing and signed by both Parties.

 

12

 

9.       ACKNOWLEDGEMENT. 
The Executive represents and acknowledges the following:

 

(a)           he has carefully read this Agreement
in its entirety;

 

(b)           he understands the terms and conditions
contained herein;

 

(c)           he has had the opportunity to review
this Agreement, at his discretion, with legal counsel of his own choosing and
has not relied on any statement made by the Corporation or its legal counsel as
to the meaning of any term or condition contained herein or in deciding whether
to enter into this Agreement; and

 

(d)           he is entering into this Agreement
knowingly and voluntarily.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the           th  day of      
             , 2003.

 

	
  INAMED CORPORATION

  	
   

  	
  EXECUTIVE

  
	
  By:

  	
  /S/ Nicholas L. Teti

  	
   

  	
  By:

  	
  /S/ Robert S. Vaters

  
	
  Nicholas L. Teti

  	
   

  	
  Robert S. Vaters

  
	
  Chairman, President and CEO

  	
   

  	
  Chief Financial Officer and Executive Vice President

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
  5540 Ekwill Street, Suite D

  	
   

  	
   

  
	
  Santa Barbara, California 93111

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: May 16, 2003

  	
   

  	
  Date: May 16, 2003

  
					

 

 

13

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