Document:

EXHIBIT 10.6

 

April 30, 2010

 

John
Damian

6898
Serena Avenue

Castle
Rock, CO 80108

 

Dear John:

 

You are hereby notified
that your employment with StarTek, Inc. (the “Company”) is hereby
terminated effective as of 5:00 p.m. on April 30, 2010.  This letter also sets forth the substance of
the terms of separation (the “Agreement”) which Company is offering to you to
aid in your employment transition.

 

1.     SEPARATION.  Your last day
of work and employment with the Company shall be April 30, 2010 (the “Separation Date”).  By executing this Agreement, you hereby
resign any and all positions held with the Company or any of its
affiliates.  Any failure to execute this
Agreement or any revocation of this Agreement by you shall not reinstate your
employment with the Company which shall be terminated as of the date and time
set forth above.

 

2.     ACCRUED SALARY. 
On the Separation Date, the Company will pay you all accrued salary
earned through the Separation Date, subject to standard payroll deductions and
withholdings.  No paid time off is
accrued and unused or payable.

 

3.     SEVERANCE PAYMENTS. 
Although the Company has no obligation to do so under the terms of your
Employment Agreement, if you timely sign, date, and return this Agreement, the
Company will pay you, as severance, the equivalent of two (2) months of
your base salary in effect as of the Separation Date, in the form of salary
continuation for such two (2) month period (“Severance Payment”).  These payments will be made on the Company’s
regular payroll cycle beginning on the first regularly-scheduled payroll date
following the Effective Date of this Agreement as set forth in Section 14,
and will be subject to standard payroll deductions and withholdings.

 

4.     HEALTH INSURANCE.  To the extent permitted by the federal COBRA law and
by the Company’s current group health insurance policies, you will be eligible
to continue your health insurance benefits at your own expense.  On or after the Separation Date, you will be
provided with a separate notice more specifically describing your rights and
obligations to continuing health insurance coverage under applicable state
insurance laws.

 

5.     STOCK OPTIONS. 
Pursuant to your stock option grant and the plan governing that grant
(the “Plan”), vesting of your stock options will cease on your Separation
Date.  You acknowledge that none of the
stock options granted to you by the Company have vested as of the Separation
Date.

 

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6.     OTHER COMPENSATION OR BENEFITS.  You acknowledge that, except as expressly provided in this Agreement,
you have not earned and will not receive any additional pay or salary,
incentive compensation, severance, equity interests or options, or benefits
after the Separation Date, with the exception of (i) any vested right you
may have under the express terms of a written ERISA-qualified benefit plan
(e.g., 401(k) account), and (ii) any amounts that may be earned under
the 2009 Sales Commission Plan between you and the Company dated July 16,
2009 (the “Commission Plan”).  In
particular, but without limitation, you agree that you are not owed any bonus,
incentive compensation, or commissions, other than as provided in the
Commission Plan.

 

7.     EXPENSE REIMBURSEMENTS. 
You agree that, within ten (10) days of the Separation Date, you
will submit your final documented expense reimbursement statement reflecting
all business expenses you incurred through the Separation Date, if any, for
which you seek reimbursement.  The
Company will reimburse you for these expenses pursuant to its regular business
practice.

 

8.     RETURN OF COMPANY PROPERTY.  By the close of
business on the Separation Date, you agree to return to the Company all Company
documents (and all copies thereof, in whole or in part) and other Company
property which you have in your possession or control, including, but not
limited to, Company files, notes, drawings, records, plans, forecasts, reports,
studies, analyses, proposals, agreements, engineering information, test data
and materials, financial information, research and development information,
sales and marketing information, customer information and databases, contact
information, operational and personnel information, specifications, code,
software, databases, computer-recorded information, tangible property and
equipment (including, but not limited to, computers, facsimile machines, mobile
telephones, pda’s, VPN access keys, servers), credit cards, entry cards,
identification badges and keys; and any materials of any kind which contain or
embody any proprietary or confidential information of the Company (and all
reproductions thereof in whole or in part). 
You agree that you will make a diligent search to locate any such
documents, property and information within the timeframe referenced above.  If you have used any personally owned
computer, server, or e-mail system to receive, store, review, prepare or
transmit any Company confidential or proprietary data, materials or
information, you agree to provide the Company with a computer-useable copy of
such information and then permanently delete and expunge such Company
confidential or proprietary information from those systems within five (5) business
days after the Separation Date; and you agree to provide the Company access to
your system as requested to verify that the necessary copying and/or deletion
is done.  You agree that, after the
Separation Date, you will neither use nor possess Company property.  Your timely
compliance with this paragraph is a condition precedent to your receipt of the
severance benefits described in paragraph 3 above.

 

9.     ACKNOWLEDGEMENT OF CONTINUING OBLIGATIONS. 
You acknowledge and reaffirm your continuing obligations under your
Manager, Executive Personnel or Assistants’ Proprietary Information,
Inventions, Non-Competition, and Non-Solicitation Agreement (Exhibit A to
your Employment Agreement) and also your Agreement to Protect TeleTech
Confidential 

 

2

 

Information and
Release.  By signing this Letter, (i) you
acknowledge those obligations, including by way of example but limitation,
obligations to keep information confidential, not to compete with the Company,
and not to solicit employees and clients of the Company, and (ii) you
further acknowledge and agree that the consideration paid by the Company to you
under your Employment Agreement and under this Agreement is sufficient and
valid consideration to support your obligations under such documents.  A copy of your full Employment Agreement is
attached hereto as Exhibit A.

 

10.  CONFIDENTIALITY.  The
provisions of this Agreement shall be held in strictest confidence by you and
the Company and shall not be publicized or disclosed in any manner whatsoever;
provided, however, that:  (a) you
may disclose this Agreement to your immediate family; (b) the parties may
disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (c) the
Company may disclose this Agreement as necessary to fulfill standard or legally
required corporate reporting or disclosure requirements; and (d) the
parties may disclose this Agreement insofar as such disclosure may be necessary
to enforce its terms or as otherwise required by law.  In particular, and without
limitation, you agree not to disclose the existence or terms of this Agreement
to any current or former Company employees, consultants, or independent
contractors.

 

11.  NON-DISPARAGEMENT.  Both you and the Company agree not to disparage the
other party, and the other party’s officers, directors, employees, shareholders
and agents, in any manner likely to be harmful to them or their business,
business reputation or personal reputation; provided that both you and the
Company shall respond accurately and fully to any question, inquiry or request
for information when required by legal process.

 

12.  NO ADMISSIONS. 
You
understand and agree that the promises and payments in consideration of this
Agreement shall not be construed to be an admission of any liability or
obligation by the Company to you or to any other person, and that the Company
makes no such admission.

 

13.  RELEASE OF CLAIMS.  In
exchange for the payments and other consideration under this Agreement to which
you would not otherwise be entitled, you hereby release, acquit and forever
discharge the Company, and its officers, directors, agents, servants,
employees, attorneys, shareholders, successors, assigns and affiliates, in
their individual, corporate and official capacities, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys’
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the date you sign this
Agreement, including but not limited to: (a) any and all such claims and
demands directly or indirectly arising out of or in any way connected with your
employment with the Company or the conclusion of that employment; (b) any
claims whatsoever against the Company or those released above by this Release
of Claims arising before you sign this Agreement; (c) all claims or
demands related to salary, bonuses, commissions, incentive payments, stock,
stock options, or any ownership or equity interests in 

 

3

 

the Company, including
vacation pay, personal time off, fringe benefits, severance benefits, or any
other form of compensation, other than under the Commission Plan; (d) all
claims pursuant to any federal, any state or any local law, statute, common law
or cause of action, employment or otherwise, including, but not limited to, the
federal Civil Rights Act of 1964, as amended, attorney’s fees under Title VII
of the federal Civil Rights Act of 1964, as amended, or any other statute,
agreement or source of law, the federal Americans with Disabilities Act of
1990, the Family and Medical Leave Act, the Employee Retirement Income Security
Act, the Age Discrimination in Employment Act, as amended (the “ADEA”), the
Colorado anti-discrimination statute, any other state or local employment,
discrimination, or labor code, and the Equal Pay Act, of 1963, as amended; (e) all
claims for breach of contract, wrongful termination, and breach of the implied
covenant of good faith and fair dealing; and (f) all tort claims,
including, but not limited to, claims for assault, battery, invasion of
privacy, fraud, defamation, emotional distress, and discharge in violation of
public policy.  You represent that you
have no lawsuits, claims or actions pending in your name or on behalf of any
other person or entity, against the Company or any other person or entity subject
to the release granted in this paragraph. 
You further agree that in the event you bring a claim or charge covered
by this release, this Agreement shall serve as a complete defense to such
claims or charges. Excluded from this release are any claims that cannot be waived by
law.  Furthermore, you agree to release
and discharge the Company not only from any and all claims which you could make
on your own behalf, but also specifically waive any right to become, and
promise not to become, a member of any class in any proceeding or case in which
a claim or claims against the Company may arise, in whole or in part, from any
event which occurred prior to the date of this Agreement.  If you are not permitted to opt-out of a
future class, then you agree to waive any recovery for which you would be eligible
as a member of such class. 
Notwithstanding the foregoing, nothing contained in this Release is
intended to release the Company from any claim arising out of or with regard to
any obligation of the Company under this Agreement.

 

14.  ADEA WAIVER AND RELEASE.  You acknowledge that you are knowingly and voluntarily
waiving and releasing any rights you may have under the ADEA.  You also acknowledge that the consideration
given for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which you were already entitled. You further
acknowledge that you have been advised by this writing, as required by the
ADEA, that:  (a) your waiver and
release do not apply to any rights or claims that may arise after the execution
date of this Agreement; (b) you have been advised hereby that you have the
right to consult with an attorney prior to executing this Agreement; (c) you
have twenty-one (21) days to consider this Agreement (although you may choose
to voluntarily execute this Agreement earlier); (d) you have seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement will not be effective until the date
upon which the revocation period has expired, which will be the eighth day
after this Agreement is executed by you, provided that the Company has also
executed this Agreement by that date (“Effective Date”).

 

If you choose to revoke the Agreement, you must
deliver written notice of the revocation to the attention of Sue Morse, Senior
Vice President, Human Resources, 44 Cook Street, 4th Floor, Denver CO, 80206 on or before seven (7) days
after you execute this Agreement.

 

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15.  REMEDY.  You agree
that, if you bring any kind of legal claim against the Company that you have
given up by signing this Agreement, then you will be violating this Agreement
and you must pay all legal fees, other costs and expenses incurred by the
Company in defending against your claim.

 

16.  MISCELLANEOUS.  This
Agreement, including Exhibit A, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with
regard to this subject matter.  It is
entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other
such promises, warranties or representations. 
This Agreement may not be modified or amended except in a writing signed
by both you and a duly authorized officer of the Company.  This Agreement shall bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure
to the benefit of both you and the Company, their heirs, successors and assigns.  If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the
provision in question shall be modified by the court so as to be rendered
enforceable.  This Agreement shall be
deemed to have been entered into and shall be construed and enforced in
accordance with the laws of the State of Colorado as applied to contracts made
and to be performed entirely within Colorado.

 

17.  EXPIRATION DATE OF OFFER. 
This offer will expire at the end of the twenty-first day after you
receive this Agreement unless before that time, you sign and return this
Agreement to StarTek.  You acknowledge
that you first received this Agreement on March 17, 2010.

 

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If this Agreement is acceptable to you, please sign below and return the
original to me.  I wish you every success
in your future endeavors.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  STARTEK,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Susan L. Morse

  
	
   

  	
   

  	
  Susan
  L. Morse

  
	
   

  	
   

  	
  SVP, Human Resources

  

 

I HAVE
READ, UNDERSTAND AND AGREE FULLY TO WHAT IS SET FORTH IN THE FOREGOING
AGREEMENT, AND I ACKNOWLEDGE MY CONTINUING OBLIGATIONS UNDER THE PROPRIETARY
INFORMATION, INVENTIONS, NON-COMPETITION, AND NON-SOLICITATION AGREEMENT:

 

	
   

  	
   

  	
  AGREED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  J. Damian

  
	
   

  	
   

  	
  John Damian

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4/30/2010

  
	
   

  	
   

  	
  Date

  

 

6

 

EXHIBIT A

 

Employment
Agreement

 

7

 

 

 

June 2,
2009

 

Mr. John
Damian

6898
Serena Avenue

Castle
Rock, CO 80108

 

Dear
John:

 

StarTek, Inc.
(“Company”) is very pleased to offer you,
John J. Damian (“Employee”) employment as Senior
Vice President, Sales reporting to Larry Jones, President and CEO.  Your start date is anticipated to be June 3,
2009.

 

1.                                      EMPLOYMENT.  This letter (“Agreement”) states the
complete terms and conditions of your employment with Company.  If you agree to these terms and conditions,
please initial the bottom of each page and sign at the end of this letter
in the spaces indicated.

 

2.                                      AT-WILL EMPLOYMENT.  It is understood and agreed by
Company and Employee that this Agreement does not contain any promise or
representation concerning the duration of Employee’s employment with
Company.  Employee specifically
acknowledges that his employment with Company is at-will and may be altered or
terminated by either Employee or Company at any time, with or without cause
and/or with or without notice.  The
nature, terms or conditions of Employee’s employment with Company cannot be
changed by any oral representation, custom, habit or practice, or any other
writing.  In addition, that the rate of
salary, any bonuses, paid time off, other compensation, or vesting schedules
are stated in units of years or months or weeks does not alter the at-will
nature of the employment, and does not mean and should not be interpreted to
mean that Employee is guaranteed employment to the end of any period of time or
for any period of time.  In the event of
conflict between this disclaimer and any other statement, oral or written,
present or future, concerning terms and conditions of employment, the at-will
relationship confirmed by this disclaimer shall control.  This at-will status cannot be altered except
in a writing signed by Employee and approved by the Company’s Board of
Directors (the “Board of Directors”).

 

3.                                      DUTIES. 
Employee shall render exclusive, full-time services to Company as its
Senior Vice President, Sales.  Employee
shall perform services under this Agreement primarily at the Denver office of
Company, and from time to time at such other locations as is necessary to
perform Employee’s duties hereunder.  In
its sole discretion, Company may change, add to, or 

 

1

 

eliminate any of Employee’s
responsibilities, working conditions and duties.  Employee shall devote Employee’s best efforts
and full business time, skill and attention to the performance of such duties
and responsibilities on behalf of Company.

 

4.                                      POLICIES AND PROCEDURES. 
Employee is subject to and shall comply with the policies and procedures
of Company, as such policies and procedures may be modified, added to or
eliminated from time to time at the sole discretion of Company, except to the
extent any such policy or procedure specifically conflicts with the express
terms of this Agreement.  No written or
oral policy or procedure of Company constitutes a contract between Company and
Employee.

 

5.                                      BASE SALARY.  Employee’s initial Base Salary (hereafter
defined) shall be $225,000
per annum.  For all services rendered and
to be rendered hereunder, Company shall pay Employee, and Employee shall accept
a salary as may be fixed by the Company from time to time (“Base Salary”) which will be paid periodically
in accordance with normal Company payroll practices and shall be subject to
Deductions.  The term “Deductions” means such employment taxes, deductions and
withholdings as Company is required to make pursuant to law, or by further
agreement with the Employee.  Employee’s
Base Salary shall be subject to periodic review and adjustment by Company.

 

6.                                      STOCK OPTIONS. 
If the StarTek, Inc. Board of Directors approves, Employee will be
awarded Incentive Stock options (to the extent allowed, with any remainder
awarded as Non-Qualified Stock options) to purchase shares of StarTek, Inc.
common stock.  The Company will propose
that Employee be granted options to purchase 75,000 shares having a strike
price equal to the closing market price on the date awarded by the Board of
Directors or Employee’s start date, whichever is later. To the extent that
Company has or may grant Employee options to purchase shares of Company common
stock (“Options”), the vesting schedule,
including without limitation, any acceleration upon change-in-control, and all
other terms, conditions and limitations of such Options will be those set forth
in the stock option plan pursuant to which such Options are granted, Option
grant notices, and Option agreements approved by the Board of Directors and
entered into by Employee.

 

7.                                      INCENTIVES.  Employee may be
eligible to participate in Company’s Incentive Bonus Plan on a pro-rated basis
beginning in 2009 with an annual bonus potential of $75,000 at 100% target
attainment (the “Bonus Potential”) and the Sales Commission Plan, each pursuant
to the terms, conditions and limitations set forth therein.

 

8.                                      OTHER BENEFITS.  While employed by Company as provided herein:

 

(a)                                  Employee Benefits. 
Employee shall be entitled to all benefits to which other executive
officers of Company are entitled, on terms comparable thereto, including,
without limitation, participation in pension and profit sharing plans, 401(k) plan,
group insurance policies and plans, medical, health, vision, and disability
insurance policies and plans, and the like, which may be maintained by Company
for the benefit of its executives. 
Company reserves the right to alter, amend, or eliminate any of such
benefits from time to time at Company’s discretion.

 

2

 

(b)                                  Expense Reimbursement. 
Company shall reimburse Employee for direct and reasonable out-of-pocket
expenses incurred by Employee in connection with the performance of Employee’s
duties hereunder, according to the policies of Company which Company may, in
its sole discretion, change from time to time.

 

(c)           Paid Time Off (PTO).  Employee will be entitled to paid time off
according to Company’s policy, which Company may change in its discretion.  Notwithstanding such policy, the minimum
amount of paid time off shall be 160 hours per annum, which will accrue in
semi-monthly increments.  Employee will
be expected to manage Employee’s time off within the allowed amount with the
approval of Employee’s manager.  No
time-off is payable at termination.

 

9.                                      CONFIDENTIAL
INFORMATION, RIGHTS AND DUTIES.

 

(a)                                                          Proprietary Information.  Employee agrees to execute and abide by
Company’s Proprietary Information, Inventions, Non-Competition and
Non-Solicitation Agreement (the “Proprietary
Information Agreement”), attached hereto as Exhibit A.

 

(b)                                                          Exclusive Property. 
Employee agrees that all Company-related business procured by Employee,
and all Company-related business opportunities and plans made known to Employee
while employed by Company, are and shall remain the permanent and exclusive
property of Company.

 

(c)                                                          Non-Competition and
Non-Solicitation.  Employee agrees that for a period of
twelve (12) months following his last day of employment with Company, he shall
continue to comply with the non-competition and non-solicitation obligations
set forth in the Proprietary Information Agreement.

 

10.                               TERMINATION. 
Employee and Company each acknowledge that either party has the right to
terminate Employee’s employment with Company at any time for any reason
whatsoever, with or with out cause or advance notice pursuant to the following:

 

(a)                                  Termination by Death or
Disability.  Subject to applicable state or federal law,
in the event that Employee shall die during his employment hereunder or become
permanently disabled, as evidenced by notice to Company and Employee’s
inability to carry out his job responsibilities for a continuous period of more
than six months, Employee’s employment and Company’s obligation to make
payments hereunder shall terminate on the date of his death, or the date upon
which, in the sole determination of the Board of Directors, Employee has become
permanently disabled, except that Company shall pay Employee any salary earned
but unpaid prior to termination, any
earned commissions payable to Employee according to the terms of a sales
commission plan in which the Employee is participating immediately prior to
termination, any benefits accrued prior to termination, and any business
expenses that were incurred but not reimbursed as of the date of termination
(the “Accrued Compensation”).  Vesting of all options shall cease on the
date of such termination.

 

(b)                                  Voluntary Resignation by
Employee.  In the event that Employee voluntarily
terminates his employment with Company, Company’s obligation to make payments 

 

3

 

hereunder shall cease upon such termination, except
Company shall pay Employee all Accrued Compensation.  Vesting of all options shall cease on the
date of such termination.

 

(c)                                  Termination for Cause. 
In the event that Employee is terminated by Company for Cause (as
defined below), then Company shall have no obligation to pay any severance
benefits to Employee.  Company’s only
obligation shall be to pay Employee all Accrued Compensation up to the date of
such termination.  Vesting of all equity
grants shall cease on such termination date.

 

(d)                                  Termination by the Company
without Cause .

 

(I)                                    In the event Employee’s employment is
terminated by Company for any reason but without Cause (which Company may do at
its discretion) prior to May 1, 2010, then Company shall have no
obligation to pay any severance benefits to Employee.  Company’s only obligation shall be to pay
Employee all Accrued Compensation up to the date of such termination.  Vesting of all equity grants shall cease on
such termination date.

 

(II)                                In the event Employee’s employment is
terminated by Company (which Company may do at its discretion) at any time
between May 1, 2010 and May 1, 2011 in connection with a claim or
threat of claim (as determined by Company in its discretion) made by TeleTech
Holdings, Inc. (or its successors and assigns) against Employee or Company
in connection with or related to an alleged violation of the “Agreement to
Protect Confidential Information, Assign Inventions, and Prevent Unfair
Competition and Unfair Solicitation” dated June 5, 2004,  between Employee and Teletech, then Company
shall have no obligation to pay any severance benefits to Employee.  Company’s only obligation shall be to pay Employee
all Accrued Compensation up to the date of such termination.  Vesting of all equity grants shall cease on
such termination date.

 

(III)                            In the event Employee’s employment is terminated (x) between
May 1, 2010 and May 1, 2011 for any reason other than pursuant to Section 10(D)(II) above
but without Cause , or (y) without Cause at any time following May 1,
2011, and provided, in either event, that Employee executes a release in the
form attached as Exhibit B (“Release”), and written a acknowledgment of Employee’s
continuing obligations under the Proprietary Information Agreement, then in
addition to payment of the Accrued Compensation, Employee shall be entitled to
receive (i) the equivalent of twelve (12) months of Employee’s annual Base
Salary as in effect immediately prior to the termination date, payable on the
same basis and at the same time as previously paid and subject to Deductions,
commencing on the first regularly 

 

4

 

scheduled pay date following the Effective Date of the Release; (ii) a
lump sum amount equal to Employee’s Annual Incentive Bonus Potential subject to
Deductions; (iii) annual incentive bonus for the year during which
termination occurs, pro-rated for time and performance as judged by CEO and
subject to Deductions; (iv) any commission payout as provided in the Sales
Commission Plan for post termination payout; and (v) provided that
Employee is eligible for and timely elects continuation of health insurance
pursuant to COBRA, for a period of twelve (12) 
months Company shall also reimburse Employee for a portion
of the cost of Employee’s COBRA premiums that is equal to, and does not
exceed,  Company’s monthly contribution
towards Employee’s health benefit premiums as of the date of termination provided, however, that Company’s obligation to pay Employee’s
COBRA premiums will cease immediately in the event Employee becomes eligible
for group health insurance during the twelve (12) months period, and Employee
hereby agrees to promptly notify Company if Employee becomes eligible to be
covered by group health insurance in such event ((i) (ii), (iii), and (iv) collectively,
the “Severance Benefits”).

 

(e)                                  Definition of
Cause.  For purposes of this Agreement, “Cause” means (i) Employee’s incompetence or failure or refusal to perform
satisfactorily any duties reasonably required of the Employee by Company; (ii) Employee’s
violation of any law, rule or regulation (other than traffic violations,
misdemeanors or similar offenses) or cease-and-desist order, court order,
judgment, regulatory directive or agreement; (iii) the commission or
omission of or engaging in any act or practice which constitutes a material
breach of the Employee’s fiduciary duty to Company, involves personal
dishonesty on the part of the Employee or demonstrates a willful or continuing
disregard for the best interests of Company; or (iv) the Employee’s
engaging in dishonorable or disruptive behavior, practices or acts which would
be reasonably expected to harm or bring disrepute to Company, its business or
any of its customers, employees or vendors.

 

11.                               CODE SECTION 409A COMPLIANCE. 
Severance Benefits pursuant to Section 10(d) above, to the
extent of payments made from the termination date through March 15 of the
calendar year following such termination, are intended to constitute separate
payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations and thus payable pursuant to the “short-term deferral” rule set
forth in Section 1.409A-1(b)(4) of the Treasury Regulations; to the
extent such payments are made following said March 15, they are intended
to constitute separate payments for purposes of Section 1.409A-2(b)(2) of
the Treasury Regulations made upon an involuntary termination from service and
payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury
Regulations, to the maximum extent permitted by said provision, with any excess
amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”),
including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of
the Code that payment to Employee be delayed until 6 months after Employee’s
separation from service if Employee is a “specified employee” within the meaning
of the aforesaid section of the Code at the time of such separation from
service.

 

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12.                               MISCELLANEOUS.

 

(a)                                  Taxes.  Employee agrees to be responsible for the payment of
any taxes due on any and all compensation, stock option, or benefit provided by
Company pursuant to this Agreement. 
Employee agrees to indemnify Company and hold Company harmless from any
and all claims or penalties asserted against Company for any failure to pay
taxes due on any compensation, stock option, or benefit provided by Company
pursuant to this Agreement.  Employee
expressly acknowledges that Company has not made, nor herein makes, any
representation about the tax consequences of any consideration provided by
Company to Employee pursuant to this Agreement.

 

(b)                                  Modification/Waiver.  This Agreement may not be amended, modified,
superseded, canceled, renewed or expanded, or any terms or covenants hereof
waived, except by a writing executed by each of the parties hereto or, in the
case of a waiver, by the party waiving compliance.  Failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect such
Party’s right at a later time to enforce the same.  No waiver by a party of a breach of any term
or covenant contained in this Agreement, whether by conduct or otherwise, in
any one or more instances shall be deemed to be or construed as a further or
continuing waiver of agreement contained in the Agreement.

 

(c)                                  Successors and Assigns.  This Agreement shall be binding upon and shall inure
to the benefit of any successor or assignee of the business of Company.  This Agreement shall not be assignable by the
Employee.

 

(d)                                  Notices.  All notices given hereunder shall be given by
certified mail, addressed, or delivered by hand, to the other party at the
address as set forth herein for such party, or at any other address hereafter
furnished by notice given in like manner. 
Employee promptly shall notify Company of any change in Employee’s address.  Each notice shall be dated the date of its
mailing or delivery and shall be deemed given, delivered or completed on such
date.

 

(e)                                  Governing Law; Personal
Jurisdiction and Venue.  This Agreement and all disputes relating
to this Agreement shall be governed in all respects by the laws of the State of
Colorado as such laws are applied to agreements between Colorado residents
entered into and performed entirely in Colorado.  The Parties acknowledge that this Agreement
constitutes the minimum contacts to establish personal jurisdiction in Colorado
and agree to Colorado court’s exercise of personal jurisdiction.

 

(f)                                    Entire Agreement.  This Agreement together with the Exhibits A and B
attached hereto, set forth the entire agreement and understanding of the
parties hereto with regard to the employment of the Employee by Company and
supersede any and all prior agreements, arrangements and understandings,
written or oral, pertaining to the subject matter hereof.  No representation, promise or inducement
relating to the subject matter hereof has been made to a party that is not
embodied in these Agreements, and no party shall be bound by or liable for any
alleged representation, promise or inducement not so set forth.

 

6

 

We look forward to having you continue to work with us
at StarTek, Inc.  If you wish to
accept this offer under the terms and conditions described above, please sign
and date this letter and the attached Proprietary
Information Agreement and return them to me by [Acceptance date].  If you have any questions about the terms of
this offer, please do not hesitate to call me to discuss our offer at your
earliest convenience.

 

	
  STARTEK, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Susan L. Morse

  	
   

  
	
   

  	
  Susan L. Morse

  	
   

  
	
  Its:

  	
  SVP, Human Resources

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  I have read this offer and I understand and I accept its terms.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ J. Damian

  	
   

  
	
  John J. Damian

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  6/3/2009

  	
   

  

 

7

 

 

EXHIBIT A

 

MANAGER, EXECUTIVE PERSONNEL OR
ASSISTANTS’

PROPRIETARY INFORMATION,
INVENTIONS,

NON-COMPETITION, AND
NON-SOLICITATION AGREEMENT

 

This
Manager, Executive Personnel or Assistants’ Proprietary Information,
Inventions, Non-competition, and Non-solicitation Agreement (“Agreement”) is made in consideration for my
employment or continued employment by StarTek, Inc.  or
its subsidiaries or affiliates (the “Company”),
and the compensation now and hereafter paid to me.  I hereby agree as follows:

 

1.             NONDISCLOSURE.

 

1.1          Recognition of Company’s Rights; Nondisclosure.  At all times during my employment and thereafter, I
will hold in strictest confidence and will not disclose, use, lecture upon or
publish any of the Company’s Proprietary Information (defined below), except as
such disclosure, use or publication may be required in connection with my work
for the Company, or unless an officer of the Company expressly authorizes such
in writing.  I will obtain Company’s
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. 
I hereby assign to the Company any rights I may have or acquire in such
Proprietary Information and recognize that all Proprietary Information shall be
the sole property of the Company and its assigns.

 

1.2          Proprietary Information. 
The term “Proprietary Information” shall mean any and all confidential
and/or proprietary knowledge, data or information of the Company.  By way of illustration but not limitation,
Proprietary Information includes (a) trade secrets, inventions, mask
works, ideas, processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, improvements, discoveries, developments,
designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information
regarding plans for research, development, new products, marketing and selling,
business plans, budgets and unpublished financial statements, licenses, prices
and costs, suppliers and customers; and (c) information regarding the
skills and compensation of other employees of the Company.  Notwithstanding the foregoing, it is
understood that, at all such times, I am free to use information which is
generally known in the trade or industry, which is not gained as result of a
breach of this Agreement, and my own, skill, knowledge, know-how and experience
to whatever extent and in whichever way I wish.

 

1.3          Third Party Information. 
I
understand, in addition, that the Company has received and in the future will
receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty
on the Company’s part to maintain the confidentiality of such information and
to use it only for certain limited purposes. 
During the term of my employment and thereafter, I will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than Company personnel who need to know such information in connection with
their work for the Company) or use, except in connection with my work for the
Company, Third Party Information unless expressly authorized by an officer of
the Company in writing.

 

1.4          No Improper Use of Information of Prior Employers and
Others.  During my employment by the Company I will not
improperly use or disclose any confidential information or trade secrets, if
any, of any former employer or any other person to whom I have an obligation of
confidentiality, and I will not bring onto the premises of the Company any
unpublished documents or any property belonging to any former employer or any
other person to whom I have an obligation of confidentiality unless consented
to in writing by that former employer or person.  I will use in the performance of my duties
only information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.

 

2.             ASSIGNMENT OF INVENTIONS.

 

2.1          Proprietary Rights.  The term “Proprietary
Rights” shall mean
all trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.

 

2.2          Prior Inventions.  Inventions, if any, patented or
unpatented, which I made prior to the 

 

 

commencement of my
employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, I have
set forth on Schedule A (Previous Inventions)
attached hereto a complete list of all Inventions that I have, alone or jointly
with others, conceived, developed or reduced to practice or caused to be
conceived, developed or reduced to practice prior to the commencement of my
employment with the Company, that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (collectively referred to as “Prior
Inventions”).  If disclosure
of any such Prior Invention would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Prior Inventions in Schedule
A but am only to disclose a cursory name for each such invention, a listing of
the party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. 
A space is provided on Schedule A for such purpose.  If no such disclosure is attached, I
represent that there are no Prior Inventions. 
If, in the course of my employment with the Company, I incorporate a
Prior Invention into a Company product, process or machine, the Company is
hereby granted and shall have a nonexclusive, royalty-free, irrevocable,
perpetual, worldwide license (with rights to sublicense through multiple tiers
of sublicensees) to make, have made, modify, use and sell such Prior
Invention.  Notwithstanding the
foregoing, I agree that I will not incorporate, or permit to be incorporated,
Prior Inventions in any Company Inventions without the Company’s prior written
consent.

 

2.3          Assignment of Inventions.  Subject to
Sections 2.4, and 2.6, I hereby assign and agree to assign in the future (when
any such Inventions or Proprietary Rights are first reduced to practice or
first fixed in a tangible medium, as applicable) to the Company all my right,
title and interest in and to any and all Inventions (and all Proprietary Rights
with respect thereto) whether or not patentable or registrable under copyright
or similar statutes, made or conceived or reduced to practice or learned by me,
either alone or jointly with others, during the period of my employment with
the Company.  Inventions assigned to the
Company, or to a third party as directed by the Company pursuant to this Section 2,
are hereinafter referred to as “Company
Inventions.”

 

2.4          Nonassignable Inventions.  I recognize
that this Agreement will not be deemed to require assignment of any invention
which was developed entirely on my own time without using the Company’s
equipment, supplies, facilities, or trade secrets and neither related to the
Company’s actual or anticipated business, research or development, nor resulted
from work performed by me for the Company (“Nonassignable Inventions”).

 

2.5          Obligation to Keep Company Informed. 
During the period of my employment and for six months after the last day
of my employment with the Company, I will promptly disclose to the Company
fully and in writing all Inventions authored, conceived or reduced to practice
by me, either alone or jointly with others. 
In addition, I will promptly disclose to the Company all patent
applications filed by me or on my behalf within a year after termination of
employment.  At the time of each such
disclosure, I will advise the Company in writing of any Inventions that I
believe are Nonassignable Inventions and I will at that time provide to the
Company in writing all evidence necessary to substantiate that belief.  The Company will keep in confidence and will
not use for any purpose or disclose to third parties without my consent any
confidential information disclosed in writing to the Company pursuant to this
Agreement relating to Inventions that have been identified as Nonassignable
Inventions.

 

2.6          Government or Third Party.  I also agree
to assign all my right, title and interest in and to any particular Invention
to a third party, including without limitation the United States, as directed
by the Company.

 

2.7          Works for Hire.  I acknowledge
that all original works of authorship which are made by me (solely or jointly
with others) within the scope of my employment and which are protectable by
copyright are “works made for hire,” pursuant to United States Copyright Act
(17 U.S.C., Section 101).

 

2.8          Enforcement of Proprietary Rights.  I
will assist the Company in every proper way to obtain, and from time to time
enforce, United States and foreign Proprietary Rights relating to Company
Inventions in any and all countries.  To
that end I will execute, verify and deliver such documents and perform such
other acts (including appearances as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Proprietary Rights and the assignment thereof.  In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its
designee.  My obligation to assist the
Company with respect to 

 

 

Proprietary Rights
relating to such Company Inventions in any and all countries shall continue
beyond the termination of my employment, but the Company shall compensate me at
a reasonable rate after my termination for the time actually spent by me at the
Company’s request on such assistance.

 

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

 

3.             NO CONFLICTS OR SOLICITATION. I agree that during the period of my
employment by the Company I will not, without the Company’s express written
consent, engage in any other employment or business activity directly related
to the business in which the Company is now involved or becomes involved, nor
will I engage in any other activities which conflict with my obligations to the
Company.  To protect the Company’s
Proprietary Information, and because of the position in the Company that I
hold, I agree that during my employment with the Company whether full-time or
part-time and for a period of twelve (12) months after my last day of
employment with the Company (regardless of the circumstances of my
termination), I will not (a) directly or indirectly solicit or induce any
employee of the Company to terminate or negatively alter his or her
relationship with the Company or (b) directly or indirectly solicit the
business of any client or customer of the Company (other than on behalf of the
Company) or (c) directly or indirectly induce any client, customer,
supplier, vendor, consultant or independent contractor of the Company to
terminate or negatively alter his, her or its relationship with the
Company.  I agree that the geographic
scope of the non-solicitation should include the “Restricted Territory” (as
defined below).

 

4.             COVENANT NOT TO COMPETE.  I
acknowledge that during my employment I will have access to and knowledge of
Proprietary Information.  I also
acknowledge that during my employment with the Company, I have held and/or will
hold a management or executive position or am, or will be, an assistant to a
manager or executive.  To protect the
Company’s Proprietary Information, and because of the position in the Company
that I hold, I agree that during my employment with the Company whether
full-time or part-time and for a period of twelve (12)  months after my last day of employment with
the Company (regardless of the circumstances of my termination), I will not
directly or indirectly personally participate or engage in (whether as an
employee, consultant, proprietor, partner, director or otherwise), or have any
ownership interest in, or participate in the financing, operation, management
or control of, any person, firm, corporation or business that engages in a “Restricted
Business” in a “Restricted Territory” (as defined below).  It is agreed that ownership of (i) no
more than one percent (1%) of the outstanding voting stock of a publicly traded
corporation, or (ii) any stock I presently own shall not constitute a
violation of this provision.

 

4.1          Reasonable.  I agree and
acknowledge that the time limitation on the restrictions in this paragraph,
combined with the geographic scope, is reasonable.  I also acknowledge and agree that this
paragraph is reasonably necessary for the protection of Company’s Proprietary
Information as defined in paragraph 1.2 herein, that through my employment I
shall receive adequate consideration for any loss of opportunity associated
with the provisions herein, and that these provisions provide a reasonable way
of protecting Company’s business value which will be imparted to me.

 

4.2          As
used herein, the terms:

 

(i)            “Restricted Business” shall mean the design,
development, marketing, commercialization or sales of any products or services
that directly compete in the marketplace with any such product then sold by the
Company or then in development by the Company and projected to be sold within
one (1) year of my last day of employment with the Company.

 

(ii)           “Restricted Territory” shall mean any state,
county, or locality in the United States in which the Company conducts business
and any other country, city, state, jurisdiction, or territory in which the
Company does business.

 

5.             RECORDS.  I agree to
keep and maintain adequate and current records (in the form of notes, sketches,
drawings and in any other form that may be 

 

 

required by the Company)
of all Proprietary Information developed by me and all Inventions made by me
during the period of my employment at the Company, which records shall be
available to and remain the sole property of the Company at all times.

 

6.             NO CONFLICTING OBLIGATION.  I
represent that my performance of all the terms of this Agreement and as an
employee of the Company does not and will not breach any agreement to keep in
confidence information acquired by me in confidence or in trust prior to my
employment by the Company.  I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith.

 

7.             RETURN OF COMPANY MATERIALS. 
When I leave the employ of the Company, I will deliver to the Company
any and all drawings, notes, memoranda, specifications, devices, formulas, and
documents, together with all copies thereof, and any other material containing
or disclosing any Company Inventions, Third Party Information or Proprietary
Information of the Company.  I further
agree that any property situated on the Company’s premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or
without notice.

 

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

 

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

 

10.          NOTIFICATION OF NEW EMPLOYER. 
In the event that I leave the employ of the Company, I hereby consent to
the notification of my new employer of my rights and obligations under this
Agreement.

 

11.          GENERAL PROVISIONS.

 

11.1        Governing Law; Consent to Personal Jurisdiction and Exclusive
Forum.  This Agreement will be governed by and
construed according to the laws of the State of Colorado without regard to
conflicts of law principles.  I hereby
expressly understand and consent that my employment is a transaction of
business in the State of Colorado and constitutes the minimum contacts
necessary to make me subject to the personal jurisdiction of the federal courts
located in the State of Colorado, and the state courts located in the County of
Boulder County, Colorado, for any lawsuit filed against me by Company arising
from or related to this Agreement.  I
agree and acknowledge that any controversy arising out of or relating to this
Agreement or the breach thereof, or any claim or action to enforce this
Agreement or portion thereof, or any controversy or claim requiring
interpretation of this Agreement must be brought in a forum located within the
State of Colorado.

 

12.          Severability. 
In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.  If any restriction set forth in
this Agreement is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too
great a range of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of activities
or geographic area as to which it may be enforceable.

 

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

 

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

 

12.3        No Employment Rights.  I agree and
understand that my employment is at-will which means I or the company each have
the right to terminate my employment at will, with or without advanced notice
and with or without cause.  I further
agree and understand that nothing in this Agreement 

 

 

shall confer any right
with respect to continuation of employment by the Company, nor shall it
interfere in any way with my right or the Company’s right to terminate my
employment at any time, with or without cause.

 

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

 

12.5        Entire Agreement.  The obligations
pursuant to Sections 1 through 4 and Sections 6 and 7 (including all subparts)
of this Agreement shall apply to any time during which I was previously
employed, or am in the future employed, by the Company as a consultant if no
other agreement governs nondisclosure and assignment of inventions during such
period.  This Agreement is the final,
complete and exclusive agreement of the parties with respect to the subject
matter hereof and supersedes and merges all prior discussions between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged.  Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement

 

This Agreement shall be
effective as of the first day of my employment with the Company, namely:  June 1, 2009

 

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

 

 

Dated: 
6/3/2009

 

 

	
  /s/ J. Damian

  	
   

  
	
  John R. Damian

  	
   

  

 

 

 

SCHEDULE A

 

TO:                                                                      StarTek, Inc.

 

FROM:

 

DATE:

 

SUBJECT:                                Previous Inventions

 

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

 

o                                  No inventions
or improvements.

 

o                                  See below:

 

 

 

 

o                                  Additional
sheets attached.

 

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

 

	
   

  	
   

  	
  Invention or Improvement

  	
   

  	
  Party(ies)

  	
   

  	
  Relationship

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 ̈                                  Additional
sheets attached.

 

 

EXHIBIT B

 

RELEASE

 

In
exchange for the consideration provided to me by this Agreement that I am not
otherwise entitled to receive, I hereby generally and completely release the
Company and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions related to my employment with the Company or the
termination of that employment, including, but not limited to: (1) all
claims related to my compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (2) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (3) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (4) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”),
and the Colorado state law (as amended).  Notwithstanding the foregoing,
nothing contained in this Release is intended to release the Company from any
claim arising out of or with regard to: (i) any payment to be made to me
by the Company in connection the termination of employment as contemplated by
the Employment Agreement, or (ii) any statutory obligation that the
Company may have with regard to the continuation of benefits.

 

[IF APPLICABLE] ADEA Waiver and
Release.  I acknowledge that I
am knowingly and voluntarily waiving and releasing any rights I may have under
the ADEA, as amended.  I also acknowledge
that the consideration given for the waiver and release in the preceding
paragraph hereof is in addition to anything of value to which I was already
entitled.  I further acknowledge that I
have been advised by this writing, as required by the ADEA, that:  (a) my waiver and release does not apply
to any rights or claims that may arise after the execution date of this
Agreement; (b) I have been advised that I have the right to consult with
an attorney prior to executing this Agreement; (c) I have been given
twenty-one (21) days to consider this Agreement; (d) I have seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement will not be effective until the date
upon which the revocation period has expired, which will be the eighth day
after this Agreement is executed by you, provided that the Company has also
executed this Agreement by that date (“Effective Date”).  The parties acknowledge
and agree that revocation by you of the ADEA Waiver and Release is not
effective to revoke your waiver or release of any other claims pursuant to this
Agreement.

 

I
agree not to disparage  Company or  Company’s officers, directors, employees,
shareholders, parents, subsidiaries, affiliates, and agents, in any manner
likely to be harmful to them or their business, business reputation or personal
reputation; provided that I may
respond accurately and fully to any question, inquiry or request for
information when required by legal process

 

	
  By:

  	
   

  	
   

  	
  Date:Exhibit 10.2

 

AMENDED
AND RESTATED ACTIVISION BLIZZARD, INC.

 

2008
INCENTIVE PLAN

 

NOTICE OF STOCK OPTION AWARD

 

You
have been awarded an option to purchase Common Shares of Activision Blizzard, Inc.
(the “Company”), as follows:

 

·                  Your name:  George Rose

 

·                  Total number of Shares purchasable upon exercise of the Stock Option
awarded:  460,000

 

·                  Exercise Price:  US$11.03
per Share

 

·                  Date of Grant:  March 4, 2010

 

·                  Expiration Date:  March 4, 2020

 

·                  Grant ID:  08003616

 

·                  Your Award of the Stock Option is
governed by the terms and conditions set forth in:

 

·                  this Notice of Stock Option Award;

 

·                  the Stock Option Award Terms attached hereto as Exhibit A
(the “Award Terms”); and

 

·                  the Company’s Amended and Restated 2008 Incentive Plan, the receipt of a
copy of which you hereby acknowledge.

 

·                  Your Stock Option Award has
been made in connection with your employment agreement with the Company or one
of its subsidiaries or affiliates as a material inducement to your entering
into or renewing employment with such entity pursuant to such agreement, and is
also governed by any applicable terms and conditions set forth in such
agreement.

 

·                  Schedule for Vesting: 
Except as otherwise provided under the Award Terms, the Stock Option
awarded to you will vest and become exercisable as follows, provided you remain
continuously employed by the Company or one of its subsidiaries or affiliates
through each such date:

 

Schedule
for Vesting

 

	
  Date of Vesting

  	
   

  	
  No. of Shares

  Vesting at Vesting

  Date

  	
   

  	
  Cumulative No. of

  Shares Vested at

  Vesting Date

  	
   

  
	
  December 30, 2010

  	
   

  	
  153,334

  	
   

  	
  153,334

  	
   

  
	
  December 30, 2011

  	
   

  	
  153,333

  	
   

  	
  306,667

  	
   

  
	
  December 30, 2012

  	
   

  	
  153,333

  	
   

  	
  460,000

  	
   

  

 

·                  The Stock Option is not intended to be an
“incentive stock option,” as such term is defined in Section 422 of the
Code.

 

 

·                  Please
sign and return to the Company this Notice of Stock Option Award, which bears
an original signature on behalf of the Company. 
You are urged to do so promptly.

 

·                  Please
return the signed Notice of Stock Option Award to the Company at:

 

Activision Blizzard, Inc.

3100 Ocean Park Boulevard

Santa Monica, CA 90405

Attn:  Stock Plan Administration

 

You
should retain the enclosed duplicate copy of this Notice of Stock Option Award
for your records.

 

Any
capitalized term used but not otherwise defined herein shall have the meaning
ascribed to such term in the Award Terms.

 

	
   

  	
  ACTIVISION
  BLIZZARD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ann E. Weiser

  
	
   

  	
  Ann E. Weiser

  
	
   

  	
  Chief Human Resources Officer

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  April 6, 2010

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED
  AND AGREED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ George Rose

  	
   

  	
   

  
	
  George
  Rose

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  March 22,
  2010

  	
   

  	
   

  
					

 

2

 

EXHIBIT
A

 

AMENDED AND RESTATED ACTIVISION
BLIZZARD, INC.

 

2008 INCENTIVE PLAN

 

STOCK OPTION AWARD TERMS

 

1.                                       Definitions.

 

(a)                                  For purposes of these Award Terms, the
following terms shall have the meanings set forth below:

 

“Award” means the award described on the Grant Notice.

 

“Cause” (i) shall have the meaning given to
such term in any employment agreement or offer letter between the Holder and
the Company or any of its subsidiaries or affiliates in effect from time to
time or (ii) if the Holder is not party to any agreement or offer letter
with the Company or any of its subsidiaries or affiliates or any such agreement
or offer letter does not contain a definition of “cause,” shall mean that the
Holder (A) engaged in misconduct or gross negligence in the performance of
his or her duties or willfully and continuously failed or refused to perform
any duties reasonably requested in the course of his or her employment; (B) engaged
in fraud, dishonesty, or any other improper conduct that causes, or in the sole
and absolute discretion of the Company has the potential to cause, harm to the
Company Group, including the business reputation or financial condition of any
member of the Company Group; (C) violated any lawful directives or
policies of the Company Group or any applicable laws, rules or regulations;
(D) materially breached his or her employment agreement, proprietary
information agreement or any other agreement with the Company Group; (E) committed,
was indicted on charges related to, convicted of, or pled guilty or no contest
to, a felony or crime involving dishonesty, moral turpitude or which could
reflect negatively upon the Company Group of otherwise impede its operations;
or (F) breached his or her fiduciary duties to the Company Group.

 

“Common Shares” means the shares of common stock, par value $0.000001
per share, of the Company or any security into which such Common Shares may be
changed by reason of any transaction or event of the type referred to in Section 8
hereof.

 

“Company” means Activision Blizzard, Inc. and any
successor thereto.

 

“Company Group” means the Company or any of its subsidiaries or other
affiliates.

 

“Company-Sponsored Equity Account” means an account that is created with
the Equity Account Administrator in connection with the administration of the
Company’s equity plans and programs, including the Plan.

 

“Date of Grant” means the Date of Grant of the Award set forth on the
Grant Notice.

 

 

“Disability” (A) shall have the meaning given to
such term in, or otherwise be determined in accordance with, any employment agreement
or offer letter between the Holder and the Company or any of its subsidiaries
or affiliates in effect from time to time or (B) if the Holder is not
party to any agreement or offer letter with the Company or any of its
subsidiaries or affiliates or any such agreement or offer letter does not
contain a definition of “disability” or otherwise provide a method for
determining whether the Holder is disabled, shall have the meaning ascribed
thereto under the Company’s long-term disability plan in effect from time to
time, as interpreted under such plan (with such interpretation to be final,
conclusive and binding for purposes of these Award Terms).

 

“Employment Violation means any material breach by the Holder
of his or her employment agreement with the Company or one of its subsidiaries
or affiliates for so long as the terms of such employment agreement shall apply
to the Holder (with any breach of the post-termination obligations contained
therein deemed to be material for purposes of these Award Terms).

 

“Equity Account Administrator” means the brokerage firm utilized by the
Company from time to time to create and administer accounts for participants in
the Company’s equity plans and programs, including the Plan.

 

“Exercise Price” means the Exercise Price set forth on the Grant
Notice.

 

“Expiration Date” means the Expiration Date
set forth on the Grant Notice.

 

“Grant Notice” means the Notice of Stock Option Award to which these
Award Terms are attached as Exhibit A.

 

“Holder” means the recipient of the Award named on the Grant
Notice.

 

“Look-back Period” means, with respect to any Employment
Violation by the Holder, the period beginning on the date which is 12
months prior to the date of such Employment Violation by the Holder and ending
on the date of computation of the Recapture Amount with respect to such
Employment Violation.

 

“Option” means the Stock Option to purchase
Common Shares awarded to the Holder on the terms and conditions described in
the Grant Notice and these Award Terms.

 

“Plan” means the Amended and Restated Activision Blizzard, Inc.
2008 Incentive Plan, as amended
from time to time.

 

“Recapture
Amount” means, with respect to any Employment Violation by the Holder, the
gross gain realized or unrealized by the Holder upon all exercises of the Stock
Option during the Look-back Period with respect to such Employment Violation,
which gain shall be calculated as the sum of:

 

(i)                                     if the Holder has exercised any portion
of the Stock Option during such Look-back Period and sold any of the Shares acquired
on exercise thereafter, an amount equal to the product of (A) the sales
price per Share sold minus the Exercise Price times (B) the number of
Shares as to which the Stock Option was exercised and which were sold at such
sales price; plus

 

A-2

 

(ii)                                  if the Holder has exercised any portion
of the Stock Option during such Look-back Period and not sold any of the Shares
acquired on exercise thereafter, an amount equal to the product of (A) the
greatest of the following: (1) the Market Value per Share of Common Shares
on the date of exercise, (2) the arithmetic average of the per share
closing sales prices of Common Shares as reported on NASDAQ for the 30 trading
day period ending on the trading day immediately preceding the date of the
Company’s written notice of its exercise of its rights under Section 11
hereof, or (3) the arithmetic average of the per share closing sales
prices of Common Shares as reported on NASDAQ for the 30 trading day period
ending on the trading day immediately preceding the date of computation, minus
the Exercise Price, times (B) the number of Shares as to which the Stock
Option was exercised and which were not sold.

 

“Section 409A” means Section 409A of the Code and
the guidance and regulations promulgated thereunder.

 

“Shares” means the Common Shares
purchasable upon exercise of the Stock Option.

 

“Term Sheet” means the Corporate Governance Term Sheet approved
by the Delaware Court of Chancery in connection with the settlement of In re Activision, Inc. Shareholder Derivative Litigation,
C.D. Cal. Case No. CV06-4771 MRP (JTLx); In re
Activision Shareholder Derivative Litigation, L.A.S.C. Case No. SC090343.

 

“Withholding Taxes” means any taxes, including, but not limited to,
social security and Medicare taxes and federal, state and local income taxes,
required to be withheld under any applicable law.

 

(b)                                 Any capitalized term used but not
otherwise defined herein shall have the meaning ascribed to such term in the
Plan.

 

2.                                       Expiration.  The Stock
Option shall expire on the Expiration Date and, after such expiration, shall no
longer be exercisable.

 

3.                                       Vesting and Exercise.

 

(a)                                  Vesting Schedule. 
Except as otherwise set forth in these Award Terms, the Stock Option
shall vest, and thereupon become exercisable, in accordance with the “Schedule
for Vesting” set forth on the Grant Notice.

 

(b)                                 Exercisable Only by the Holder. 
Except as otherwise permitted under the Plan or Section 10 hereof,
the Stock Option may be exercised during the Holder’s lifetime only by the
Holder or, in the event of the Holder’s legal incapacity to do so, by the
Holder’s guardian or legal representative acting on behalf of the Holder in a
fiduciary capacity under state law and/or court supervision.

 

(c)                                  Procedure for Exercise. 
The Stock Option may be exercised by the Holder as to all or any of the
Shares as to which the Stock Option has vested (i) by following the
procedures for exercise established by the Equity Account Administrator and
posted on the Equity Account Administrator’s website from time to time or (ii) with
the Company’s consent, 

 

A-3

 

by giving the Company written notice of exercise, in
such form as may be prescribed by the Company from time to time, specifying the
number of Shares to be purchased.

 

(d)                                 Payment of Exercise Price. 
To be valid, any exercise of the Stock Option must be accompanied by
full payment of the aggregate Exercise Price of the Shares being
purchased.  The Company shall determine the
method or methods the Holder may use to make such payment, which may include
any of the following:  (i) by bank
check or certified check or wire transfer of immediately available funds, (ii) if
securities of the Company of the same class as the Shares are then traded or quoted on a national
securities exchange, the Nasdaq Stock Market, Inc. or a national quotation
system sponsored by the National Association of Securities Dealers, Inc.,
through the delivery of irrevocable written instructions, in a form acceptable
to the Company, to the Equity Account Administrator (or, with the Company’s
consent, such other brokerage
firm as may be requested by the person exercising the Stock Option) to sell
some or all of the Shares being purchased upon such exercise and to thereafter
deliver promptly to the Company from the proceeds of such sale an amount in
cash equal to the aggregate Exercise Price of the Shares being purchased, (iii) by
tendering previously owned shares (valued at their Market Value per Share as of
the date of tender), (iv) through the withholding of Shares otherwise
deliverable upon exercise, or (v) any combination of (i), (ii), (iii) or
(iv) above or any other manner permitted pursuant to the Plan.

 

(e)                                  No Fractional Shares. 
In no event may the Stock Option be exercised for a fraction of a Share.

 

(f)                                    No Adjustment for Dividends or Other
Rights.  No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date as of
which the issuance or transfer of Shares to the person entitled thereto has
been evidenced on the books and records of the Company pursuant to clause (ii) of
Section 3(g) hereof following exercise of the Stock Option.

 

(g)                                 Issuance and Delivery of Shares. 
As soon as practicable (and, in any event, within 30 days) after the
valid exercise of the Stock Option, the Company shall (i) effect the
issuance or transfer of the Shares purchased upon such exercise, (ii) cause the
issuance or transfer of such Shares to be evidenced on the books and records of
the Company, and (iii) cause such Shares to be delivered to a
Company-Sponsored Equity Account in the name of the person entitled to such
Shares (or, with the Company’s consent, such other brokerage account as may be
requested by such person); provided, however, that, in the event
such Shares are subject to a legend as set forth in Section 14 hereof, the
Company shall instead cause a certificate evidencing such Shares and bearing
such legend to be delivered to the person entitled thereto.

 

(h)                                 Partial Exercise. 
If the Stock Option shall have been exercised with respect to less than
all of the Shares purchasable upon exercise of the Stock Option, the Company
shall make a notation in its books and records to reflect the partial exercise
of the Stock Option and the number of Shares that thereafter remain available
for purchase upon exercise of the Stock Option.

 

4.                                       Termination of Employment.

 

(a)                                  Cause.  In the event
that the Holder’s employment is terminated by the Company or any of its
subsidiaries or affiliates for Cause, as of the date of such termination of 

 

A-4

 

employment the Stock Option shall (i) cease to
vest, if not then fully vested, (ii) no longer be exercisable, whether or
not vested, and (iii) be immediately cancelled.

 

(b)                                 Death or Disability. Unless the Committee determines
otherwise, in the event that the Holder dies while employed by the Company or
any of its subsidiaries or affiliates or the Holder’s employment with the
Company or any of its subsidiaries or affiliates is terminated due to the
Holder’s Disability, the Stock Option shall (i) cease to vest as of the
date of the Holder’s death or the first date of the Holder’s Disability (as
determined by the Committee), as the case may be, and (ii) to the extent
vested as of the date of the Holder’s death or the first date of the Holder’s
Disability, as the case may be, remain exercisable in accordance with these
Award Terms until the earlier of (A) the first anniversary of the date of
the Holder’s death or termination of employment, as the case may be, and (B) the
Expiration Date, after which the Stock Option shall no longer be exercisable
and shall be immediately cancelled.  To
the extent not vested as of the date of the Holder’s death or the first date of
the Holder’s Disability, as the case may be, the Stock Option shall be
immediately cancelled and shall no longer be exercisable.

 

(c)                                  Other.  Unless the
Committee determines otherwise, in the event that the Holder’s employment is
terminated for any reason not addressed by Section 4(a) or 4(b) hereof,
the Stock Option shall (i) cease to vest as of the date of such
termination of employment and (ii) to the extent vested as of the date of
such termination of employment, be exercisable in accordance with these Award
Terms until the earlier of (A) the 30th day after the date of such
termination of employment  and (B) the
Expiration Date, after which the Stock Option shall no longer be exercisable
and shall be immediately cancelled.  To
the extent not vested as of the date of such termination of service, the Stock
Option shall be immediately cancelled and shall no longer be exercisable.

 

5.                                       Tax Withholding. 
The Company shall have the right to require the Holder to satisfy any
Withholding Taxes resulting from the exercise (in whole or in part) of the
Stock Option, the issuance or transfer of any Shares upon exercise of the Stock
Option or otherwise in connection with the Award at the time such Withholding
Taxes become due.  The Company shall
determine the method or methods the Holder may use to satisfy any Withholding
Taxes contemplated by this Section 5, which may include any of the
following:  (a) by delivery to the
Company of a bank check or certified check or wire transfer of immediately
available funds; (b) if securities of the Company of the same class as the
Shares are then traded or quoted on a national securities exchange, the Nasdaq
Stock Market, Inc. or a national quotation system sponsored by the
National Association of Securities Dealers, Inc., through the delivery of
irrevocable written instructions, in a form acceptable to the Company, to the
Equity Account Administrator (or, with the Company’s consent, such other
brokerage firm as may be requested by the person exercising the Stock Option)
to sell some or all of the Shares being purchased upon such exercise and to
thereafter deliver promptly to the Company from the proceeds of such sale an
amount in cash equal to the aggregate amount of such Withholding Taxes; (c) by
tendering previously owned shares (valued at their Market Value per Share as of
the date of tender); (d) through the withholding of Shares otherwise
deliverable upon exercise; or (e) by any combination of (a), (b), (c) or
(d) above.  Notwithstanding anything
to the contrary contained herein, (i) the Company or any of its
subsidiaries or affiliates shall have the right to withhold from the Holder’s
compensation any Withholding Taxes contemplated by this Section 5 and (ii) the
Company shall have no obligation to deliver any Shares upon exercise of the
Stock Option unless and until all Withholding Taxes contemplated by this Section 5
have been satisfied.

 

A-5

 

6.                                       Reservation of Shares. 
The Company shall at all times reserve for issuance or delivery upon
exercise of the Stock Option such number of Common Shares as shall be required
for issuance or delivery upon exercise thereof.

 

7.                                       Committee Discretion. 
Except as may otherwise be provided in the Plan, the Committee shall
have sole discretion to (a) interpret any provision of the Plan, the Grant
Notice and these Award Terms, (b) make any determinations necessary or
advisable for the administration of the Plan and the Award, and (c) waive
any conditions or rights of the Company under the Award, the Grant Notice or
these Award Terms.  Without intending to
limit the generality or effect of the foregoing, any decision or determination
to be made by the Committee pursuant to these Award Terms, including whether to
grant or withhold any consent, shall be made by the Committee in its sole and
absolute discretion, subject only to the terms of the Plan.  Subject to the terms of the Plan, the
Committee may amend the terms of the Award prospectively or retroactively;
however, no such amendment may materially and adversely affect the rights of
the Holder taken as a whole without the Holder’s consent.  Without intending to limit the generality or
effect of the foregoing, the Committee may amend the terms of the Award (i) in
recognition of unusual or nonrecurring events (including, without limitation,
events described in Section 8 hereof) affecting the Company or any of its
subsidiaries or affiliates or the financial statements of the Company or any of
its subsidiaries or affiliates, (ii) in response to changes in applicable
laws, regulations or accounting principles and interpretations thereof, or (iii) to
prevent the Award from becoming subject to Section 409A.

 

8.                                       Adjustments. 
Notwithstanding anything to the contrary contained herein, pursuant to Section 12
of the Plan, the Committee will make or provide for such adjustments to the
Award as are equitably required to prevent dilution or enlargement of the
rights of the Holder that would otherwise result from (a) any stock
dividend, extraordinary dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, (b) any
change of control, merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation or other distribution
of assets, or issuance of rights or warrants to purchase securities, or (c) any
other corporate transaction or event having an effect similar to any of the
foregoing.  Moreover, in the event of any
such transaction or event, the Committee, in its discretion, may provide in
substitution for the Award such alternative consideration (including, without
limitation, cash or other equity awards), if any, as it may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of the Award.

 

9.                                       Registration and Listing. 
Notwithstanding anything to the contrary contained herein, the Stock
Option may not be exercised, and the Stock Option and Shares purchasable upon
exercise of the Stock Option may not be purchased, sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of or encumbered in any way, unless
such transaction is in compliance with (a) the Securities Act of 1933, as
amended, or any comparable federal securities law, and all applicable state
securities laws, (b) the requirements of any securities exchange,
securities association, market system or quotation system on which securities
of the Company of the same class as the Shares are then traded or quoted, (c) any
restrictions on transfer imposed by the Company’s certificate of incorporation
or bylaws, and (d) any policy or procedure the Company has adopted with
respect to the trading of its securities, in each case as in effect on the date
of the intended transaction.  The Company
is under no obligation to register, qualify or list, or maintain the
registration, qualification or listing of, the Stock Option or Shares with the
SEC, any state securities commission or any securities exchange, securities
association, market system 

 

A-6

 

or quotation system to effect such compliance.  The Holder shall make such representations
and furnish such information as may be appropriate to permit the Company, in
light of the then existence or non-existence of an effective registration
statement under the Securities Act of 1933, as amended, relating to the Stock
Option or Shares, to issue or transfer the Stock Option or Shares in compliance
with the provisions of that or any comparable federal securities law and all
applicable state securities laws.  The
Company shall have the right, but not the obligation, to register the issuance
or resale of the Stock Option or Shares under the Securities Act of 1933, as
amended, or any comparable federal securities law or applicable state
securities law.

 

10.                                 Transferability. 
Except as otherwise permitted under the Plan or this Section 10,
the Stock Option shall not be transferable by the Holder other than by will or
the laws of descent and distribution. 
Subject to the terms of the Plan, with the Company’s consent, the Holder
may transfer all or part of the Stock Option for estate planning purposes or
pursuant to a domestic relations order; provided, however, that
any transferee shall be bound by all of the terms and conditions of the Plan,
the Grant Notice and these Award Terms and shall execute an agreement in form
and substance satisfactory to the Company in connection with such transfer; and
provided  further that the Holder will remain bound by the terms
and conditions of the Plan, the Grant Notice and these Award Terms.

 

11.                                 Employment Violation. 
The terms of this Section 11 shall apply to the Stock Option if the
Holder is or becomes subject to an employment agreement with the Company or any
of its subsidiaries or affiliates.  In
the event of an Employment Violation, the Company shall have the right to
require (i) the termination and cancellation of the Stock Option, whether
vested or unvested, and (ii) payment by the Holder to the Company of the
Recapture Amount with respect to such Employment Violation; provided, however,
that, in lieu of payment by the Holder to the Company of the Recapture Amount,
the Holder, in his or her discretion, may tender to the Company the Shares
acquired upon exercise of the Stock Option during the Look-back Period with
respect to such Employment Violation and the Holder shall not be entitled to
receive any consideration from the Company in exchange therefor.  Any such termination of the Stock Option and
payment of the Recapture Amount, as the case may be, shall be in addition to,
and not in lieu of, any other right or remedy available to the Company arising
out of or in connection with such Employment Violation, including, without
limitation, the right to terminate the Holder’s employment if not already
terminated and to seek injunctive relief and additional monetary damages.

 

12.                                 Compliance with Applicable Laws and
Regulations and Company Policies and Procedures.

 

(a)                                  The Holder is responsible for complying
with (a) any federal, state and local taxation laws applicable to the
Holder in connection with the Award, (b) any federal and state securities
laws applicable to the Holder in connection with the Award, (c) the
requirements of any securities exchange, securities association, market system
or quotation system on which securities of the Company of the same class as the
Shares are then traded or quoted, (d) any restrictions on transfer imposed
by the Company’s certificate of incorporation or bylaws, and (e) any
policy or procedure the Company maintains or may adopt with respect to the
trading of its securities.

 

(b)                                 The Award is subject to the terms and
conditions of the Term Sheet, and any Company policies or procedures adopted in
connection with the Company’s implementation 

 

A-7

 

of the Term Sheet, including, without limitation, any
policy requiring or permitting the Company to recover any gains realized by the
Holder in connection with the Award.

 

13.                                 Section 409A. 
As the Exercise Price is equal to the fair market value of a Share on
the Date of Grant, payments contemplated with respect to the Award are intended
to be exempt from Section 409A, and all provisions of the Plan, the Grant
Notice and these Award Terms shall be construed and interpreted in a manner
consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding the foregoing, (i) nothing
in the Plan, the Grant Notice and these Award Terms shall guarantee that the
Award is not subject to taxes or penalties under Section 409A and (ii) if
any provision of the Plan, the Grant Notice or these Award Terms would, in the
reasonable, good faith judgment of the Company, result or likely result in the
imposition on the Holder or any other person of taxes, interest or penalties
under Section 409A, the Committee may, in its sole discretion, modify the
terms of the Plan, the Grant Notice or these Award Terms, without the consent
of the Holder, in the manner that the Committee may reasonably and in good
faith determine to be necessary or advisable to avoid the imposition of such
taxes, interest or penalties; provided, however, that this Section 13
does not create an obligation on the part of the Committee or the Company to
make any such modification.

 

14.                                 Legend.  The Company
may, if determined by it based on the advice of counsel to be appropriate,
cause any certificate evidencing Shares to bear a legend substantially as
follows:

 

“THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT.”

 

15.                                 No Right to Continued Employment. 
Nothing contained in the Grant Notice or these Award Terms shall be
construed to confer upon the Holder any right to be continued in the employ of
the Company or any of its subsidiaries or affiliates or derogate from any right
of the Company or any of its subsidiaries or affiliates to retire, request the
resignation of, or discharge the Holder at any time, with or without Cause.

 

16.                                 No Rights as Stockholder. 
No holder of the Stock Option shall, by virtue of the Grant Notice or
these Award Terms, be entitled to any right of a stockholder of the Company,
either at law or in equity, and the rights of any such holder are limited to
those expressed, and are not enforceable against the Company except to the
extent set forth, in the Plan, the Grant Notice and these Award Terms.

 

17.                                 Severability.  In the event that one or more of the
provisions of these Award Terms shall be invalidated for any reason by a court
of competent jurisdiction, any provision so invalidated shall be deemed to be
separable from the other provisions hereof, and the remaining provisions hereof
shall continue to be valid and fully enforceable.

 

18.                                 Governing Law. 
To the extent that federal law does not otherwise control, the validity,
interpretation, performance and enforcement of the Grant Notice and these Award
Terms shall be governed by the laws of the State of Delaware, without giving
effect to principles of conflicts of laws thereof.

 

A-8

 

19.                                 Successors and Assigns. 
The provisions of the Grant Notice and these Award Terms shall be
binding upon and inure to the benefit of the Company, its successors and
assigns, and the Holder and, to the extent applicable, the Holder’s permitted
assigns under Section 3(b) hereof and the Holder’s estate or
beneficiary(ies) as determined by will or the laws of descent and distribution.

 

20.                                 Notices.  Any notice or
other document which the Holder or the Company may be required or permitted to
deliver to the other pursuant to or in connection with the Grant Notice or
these Award Terms shall be in writing, and may be delivered personally or by
mail, postage prepaid, or overnight courier, addressed as follows: (a) if
to the Company, at its office at 3100 Ocean Park Boulevard, Santa Monica,
California 90405, Attn: Stock Plan Administration, or such other address as the
Company by notice to the Holder may designate in writing from time to time; and
(b) if to the Holder, at the address shown in any employment agreement or
offer letter between the Holder and the Company or any of its subsidiaries or
affiliates in effect from time to time or such other address as the Holder by
notice to the Company may designate in writing from time to time.  Notices shall be effective upon receipt.

 

21.                                 Conflict with Employment Agreement or
Plan.  In the event of any conflict between the
terms of any employment agreement or offer letter between the Holder and the
Company or any of its subsidiaries or affiliates in effect from time to time
and the terms of the Grant Notice or these Award Terms, the terms of the Grant
Notice or these Award Terms, as the case may be, shall control.  In the event of any conflict between the
terms of any employment agreement or offer letter between the Holder and the
Company or any of its subsidiaries or affiliates in effect from time to time,
the Grant Notice or these Award Terms and the terms of the Plan, the terms of
the Plan shall control.

 

22.                                 Deemed Agreement. 
By accepting the Award, the Holder is deemed to be bound by the terms
and conditions set forth in the Plan, the Grant Notice and these Award Terms.

 

A-9

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