Document:

Exhibit 10.2

 

         

Quest Diagnostics Incorporated

Form of Buy-Out Restricted Stock Unit Award Agreement

 

This Buy-Out Restricted Stock Award Agreement (the “Agreement”) dated as of _____________, 2012 (the “Grant Date”) between Quest Diagnostics Incorporated, 3 Giralda Farms, Madison, NJ 07940 (the “Company”) and the employee to whom the award described herein is made (the “Employee”) is subject in all respects to the Company’s Amended and Restated Employee Long-Term Incentive Plan (the “Plan”).  All references to “Shares” means shares of the Company’s Common Stock.

 

This Agreement and the awards described herein are effective as of the grant date but shall be canceled if the Employee fails to complete, not later than thirty (30) days after such awards are communicated electronically to the Employee, all the steps to accept the RSUs (as hereinafter defined) electronically at the Morgan Stanley Smith Barney Benefit Access website (www.benefitaccess.com) (the “Site”), including without limitation acknowledging that the Employee has read all of the documentation provided at the Site and affixing the Employee’s electronic signature, so that the status indicator at the Site reflects “Accepted” for the RSUs.

 

If the status indicator at the Site for the RSUs does not reflect “Accepted” by Midnight on the thirtieth (30th) day after the awards described herein are communicated electronically to the Employee, this Agreement, and the awards described herein, shall be cancelled.

 

AWARD COVERED BY THIS AGREEMENT

 

SECTION 1.     Restricted Share Units.  The Company hereby awards 20,000 restricted share units (each, an “RSU”) to the Employee under the Plan.  Each RSU corresponds to one Share and constitutes a contingent and unsecured promise of the Company to pay the Employee one Share on the vesting date for the RSU, subject to the terms and conditions set forth in the Plan and this Agreement.  The RSUs shall vest and convert to Shares on the terms set forth in Section 2.  For purposes of this Agreement, an “RSU Share” means a Share delivered upon conversion of an RSU.

 

 

 

1 Note to draft: Conform agreement for physical signatures if this award will not be granted via BenefitAccess.Com.

 

   

  

  

  

 

SECTION 2.     Vesting of RSUs.

 

(a)          General Vesting Requirements.  Except as otherwise provided in this Agreement, the RSUs shall vest on the vesting dates set forth below (the “RSU Vesting Dates”), provided that the Employee remains in continuous employment with the Company through the applicable RSU Vesting Date.

 

	
RSU Vesting Dates

	
Vesting Percent

	
Cumulative

	
April 15, 2013

	
50%

	
50%

	
April 15, 2014

	
50%

	
100%

      

Except as otherwise set forth in this Agreement, RSUs will convert to Shares as soon as practicable, and in all cases within fourteen (14) days, after the date on which the RSUs vest (whether vesting occurs on a RSU Vesting Date or as provided in Sections 2(b) through 2(g)) and such Shares, net of required tax withholding as described in Section 9 below, shall be transferred into the Employee’s account at the Company’s dedicated broker.

 

(b)          Termination of Employment Generally.  If the Employee’s employment is terminated (other than for one of the reasons set forth elsewhere in this Section 2) three months or more after the Grant Date but prior to April 15, 2014, the Employee will vest as of the Termination Date in a number of RSUs determined by multiplying the number of RSUs that are scheduled to vest on the next RSU Vesting Date by a fraction, (i) the numerator of which is the number of whole months from the Grant Date or, if the Termination Date occurs more than one year after the Grant Date, the most recent anniversary of the Grant Date, to the Termination Date and (ii) the denominator of which is 12; and any unvested RSUs will be canceled.  No RSUs shall vest under this Section 2(b) if the Employee’s termination of employment occurs less than three months after the Grant Date, except as provided below.

 

(c)          Leave of Absence.  Notwithstanding anything to the contrary contained herein, if the Employee is on a bona fide leave of absence approved by the Company for medical, personal, educational and/or other permissible purposes pursuant to policies of the Company as in effect from time to time, for a consecutive six-month period, such Employee will be deemed to have terminated employment for purposes of this Section 2 (including under Section 2(b)) on the first day following the six-month anniversary of the commencement of such leave of absence, provided, however, that the Employee will not be considered to have terminated employment for so long as the Employee retains a right to reemployment with the Company under an applicable statute or by contract.  Upon termination of the Employee’s employment after six months of bona fide leave of absence as provided in the preceding sentence (or upon later lapse or termination of the Employee’s statutory or contractual right to reemployment with the Company), the Employee shall immediately vest in a number of RSUs as provided in Section 2(b).  Any RSUs that remain unvested will be canceled; provided, however, that if the Employee’s employment is terminated pursuant to this Section 2(c) six months following the commencement of a medical or disability leave, any RSUs that have not vested in accordance with the applicable provisions of this Section 2 shall not be canceled until the date that is eighteen (18) months after the Termination Date; and provided, further, that if the Employee delivers to the Company evidence satisfactory to the Company that the Social Security Administration has determined that the Employee is disabled in accordance with the timing requirements set forth in Section 2(e), the provisions of such Section 2(e) shall apply.  For purposes of this Section 2(c), an Employee’s leave of absence shall be considered “bona fide” only if there is a reasonable expectation that the Employee will return to perform services for the employer.

  

  

  

   

(d)          Death.  If the Employee shall die while employed, on the date of the Employee’s death, all RSUs shall vest.

 

(e)          Disability.  In the event that the Employee’s employment has terminated pursuant to Section 2(c) at the end of a medical or disability leave, if the Employee delivers evidence satisfactory to the Company that the Social Security Administration has determined that the Employee is disabled (as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)), both (i) on or before the date that is eighteen (18) months after the Termination Date, and (ii) no later than the date that is six (6) months after the date on which the Social Security Administration has made its determination (the “Disability Determination Date”), all RSUs shall vest as of the date that is six (6) months following the Disability Determination Date.

 

(f)          Change in Control.  The following shall apply upon the occurrence of a Change in Control, provided the Employee was employed by the Company on the effective date of the Change in Control:

 

(i)     All RSUs will vest immediately upon the Change in Control, but conversion of RSUs to Shares will be determined pursuant to clauses (ii) and (iii) below.

 

(ii)     If the Change in Control constitutes a “change in the ownership” of the Company, a “change in effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company, as such terms are used in Treas. Reg. §1.409A-3(i)(5), then all RSUs shall convert to Shares as soon as practicable, and in all cases within fourteen (14) days after, the effective date of the Change in Control.

 

(iii)     In the case of any Change in Control not described in clause (ii) above, RSUs shall convert to Shares at the time(s) they would have converted pursuant to the applicable provisions of this Section 2 in the absence of the Change in Control, provided, however, that in the event the Employee’s employment with the Company terminates for any reason following the Change in Control, all RSUs shall convert to shares as soon as practicable, and in all cases within fourteen (14) days, following the Termination Date.

 

For purposes of this Agreement, the term “Change in Control” shall mean and shall be deemed to occur if and when:

 

(x)     Any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s then outstanding securities; or

  

  

  

(y)     The individuals who, as of the Grant Date, constituted the Company’s Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual (other than any individual whose initial assumption of office is in connection with an actual or threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934)) becoming a director subsequent to the Grant Date, whose election, or nomination for election by the stockholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual was a member of the Incumbent Board; or

 

(z)     The Company consummates any of the following transactions that are required to be approved by shareholders:  (a) a transaction in which the Company ceases to be an independent publicly owned corporation, or (b) the sale or other disposition of all or substantially all of the Company’s assets, or (c) a plan of partial or complete liquidation of the Company.

 

(g)         Involuntary Termination with Severance or Divestiture.  If prior to April 15, 2014, the Employee’s employment is terminated by the Company as a result of a separation which would entitle the Employee to severance benefits under the Employee’s employment agreement with the Company (and thereby under the Company Executive Officer Severance Plan), all RSUs will immediately vest.

 

(h)         Separation from Service.  For purposes of this Section 2, Employee will be considered to have experienced a “termination of employment” only if the Employee has experienced a “separation from service” with the Company for purposes of Section 409A of the Code determined using the default provisions set forth in Treasury Regulation §1.409A-1(h) or any successor regulation thereto.  For purposes of this definition, the Company is considered to include any corporation that is in the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company and any trade or business that is under common control with the Company (within the meaning of Section 414(c) of the Code), determined in each case by substituting “at least 20%” for “at least 50%” as permitted by Treasury Regulation §1.409A-1(h)(3) for purposes of such determinations.  (By way of illustration, an Employee’s transfer to a joint venture or other entity in which the Company has a 40% interest generally would not constitute a “termination of employment” for purposes of this Section 2, while transfer to a joint venture or other entity in which the Company has only a 19% interest would constitute a termination of employment.)

 

(i)         Specified Employees.  Notwithstanding any other terms of this Agreement, if the Company considers the Employee to be one of its “specified employees” as defined in Section 409A of the Code at the time of the Employee’s termination of employment, the conversion of any of the Employee’s RSUs that otherwise would convert upon the Employee’s termination of employment will be delayed for six months after such termination of employment, and such RSUs will convert to Shares on the first business day following the date that is six months after the Employee’s termination of employment; provided, however, that in the event of the Employee’s death, the RSUs will convert to Shares pursuant to Section 2(d).

    

  

  

  

     

TERMS AND CONDITIONS APPLICABLE TO AWARD

 

SECTION 3.     Cancellation.  Notwithstanding anything to the contrary contained herein, this Agreement shall expire and be canceled, the Employee will not vest in any RSUs and all RSUs (whether or not vested) shall be canceled if:

 

(i)     the Employee shall cause the Company to suffer financial harm or damage to its reputation (either before or after termination of employment) through (x) dishonesty, (y) violation of law in the course of the Employee’s employment or violation of the Company’s Corporate Compliance Manual and compliance bulletins or other written policies or (z) material deviation from the duties owed the Company by the Employee; or

 

(ii)     the Employee is subject to the Executive Share Ownership Policy, as such policy may be amended from time to time (the “Ownership Policy”), and the Employee makes any false attestation under the Ownership Policy; or

 

(iii)    the Employee violates the terms of any confidentiality, non-solicit or non-compete obligations or any other restrictive covenant set forth in any agreement between the Employee and the Company, or otherwise pursuant to any written policy of the Company (in any such case, a “Restrictive Covenant”).

 

The Company may require the Employee to provide a written certification or other evidence, from time to time in the Company’s sole discretion, to confirm that no cancellation event identified in clauses (i), (ii) or (iii) above has occurred, including upon or following a termination of employment for any reason and/or during a specified period of time prior to the scheduled delivery of any RSU Shares.  If the Employee fails to provide any required certification or other evidence by the specified deadline, the Company shall have the right to cancel the Employee’s award and/or, as discussed in the next paragraph, to cause the delivery of any RSU Shares under this Agreement to be rescinded (and if the Employee has previously sold the Shares issued pursuant to this Agreement, the Employee would be required to pay back to the Company the pre-tax proceeds received from the sale of such Shares).

 

The Employee understands that the cancellation of any awards or rights under this Agreement is only one element of the damages potentially sustained by the Company for any action described in this Section 3 or a violation of any Restrictive Covenant.  Such cancellation shall be in addition to any equitable and legal rights the Company has or may have and shall not constitute a release of any claim that the Company may have for damages, past, present, or future.  In addition, a breach by the Employee of any provisions of any Restrictive Covenant that occurs after any delivery of Shares pursuant to this Agreement (including any breach occurring after termination of employment) shall cause the delivery of any RSU Shares under this Agreement to be rescinded (and if the Employee has previously sold the Shares issued pursuant to this Agreement, the Employee would be required to pay back to the Company the pre-tax proceeds received from the sale of such Shares).  For purposes of this Section 3, the term “Company” shall mean the Company, its affiliates, divisions and subsidiaries, or any other entity in which the Company, directly or indirectly, controls or has an ownership or equity interest equal to or greater than 25.0% of the combined voting power of the entity’s then outstanding securities, and their respective successors and assigns.

  

  

  

  

SECTION 4.     Executive Share Ownership Policy.

 

(a)          Employees Subject to Ownership Policy.  The Employee is subject to the Ownership Policy.  In consideration of the grant of the awards under this Agreement, the Employee agrees that the RSUs and all RSU Shares shall be subject to cancellation pursuant to Section 3(ii) of this Agreement and all Options, Option Shares, RSUs, RSU Shares, Performance Shares and shares of restricted stock granted to the Employee by the Company prior to the date hereof (the “Prior Awards”) shall be subject to cancellation pursuant to Section 3(ii) of this Agreement (for false attestation under the Ownership Policy), the Shares obtained on exercise of such Prior Awards after the date hereof shall be subject to the Ownership Policy pursuant to Section 4(b) of this Agreement and the terms of Sections 3 and 4(b) hereof are made a part of the terms of each of the Prior Awards.

 

(b)          Shares Subject to Ownership Policy.  Any Shares issued under this Agreement or pursuant to any Prior Award (in each case net of tax withholdings) are subject to such policy.  The Employee hereby acknowledges and agrees that the investment risk associated with the retention of any Shares, whether pursuant to the Ownership Policy or otherwise, is the sole responsibility of the Employee and the Employee hereby holds the Company harmless against any claim of loss related to the retention of the Shares.

 

SECTION 5.     Non-Transferability; Voting Rights and Dividends.

 

(a)          Non-Transferability.  The awards and rights under this Agreement shall not be transferable other than by will or the laws of descent and distribution.

 

(b)          Voting and Dividend Rights.  The Employee will not have any voting, dividend or other rights as a stockholder with respect to any RSUs or RSU Shares prior to the date on which he is recorded as the holder of such RSU Shares on the records of the Company; provided, however that until RSUs convert to Shares, if the Company declares and pays a regular or ordinary dividend on its Common Stock, the Employee will be paid a dividend equivalent for vested and unvested RSUs, but no dividend equivalents will be paid on any RSUs that are canceled.  The Employee understands that Shares will not be issued to the Employee in respect of RSUs until after (and to the extent that) RSUs convert to Shares, it being understood that such issuance shall occur in any event on or prior to the March 15 of the taxable year following the taxable year in which such RSUs vest hereunder.  The Employee further understands that all deliveries of Shares under this Agreement shall be net of required tax withholding as described in Section 9 below.  Until Shares have been delivered to or on behalf of the Employee in respect of any RSUs, the Employee shall have only the rights of a general unsecured creditor.

 

(c)         Assignment.  Until Shares are transferred to the Employee’s account at the Company’s dedicated broker or the Employee otherwise receives physical possession of any such Shares, the Employee shall have no right to sell, assign, transfer, pledge or otherwise encumber Shares in any manner.  Any purported attempt to sell, assign, transfer, pledge or otherwise encumber any award under this Agreement will be void and shall result in the cancellation of such award.  Unless otherwise provided at the time of such transfer or delivery to the Employee of any  Shares issued in respect of vested RSUs, upon such transfer or delivery to the Employee the Shares will not be subject to any restrictions on transfer other than those that may arise under the securities laws or the Company’s policies, but the Shares shall remain subject to cancellation as provided in Section 3.

  

  

  

    

SECTION 6.     Consideration.  In consideration for the awards under this Agreement, the Employee hereby agrees to be bound by all Restrictive Covenants applicable to the Employee.

 

SECTION 7.     Clawback.  All awards hereunder to an executive officer shall be subject to cancellation and recoupment by the Company, and shall be repaid by the Employee to the Company, to the extent required by law, regulation or listing requirement, or by any Company policy adopted pursuant thereto.

 

SECTION 8.     The Plan.  The Plan is incorporated herein by reference.  The Employee acknowledges that he/she has read the terms of the Plan and that those terms shall govern in the event of any conflict with the terms of this Agreement.

 

SECTION 9.     Taxes.  The transfer of Shares upon conversion of any vested RSUs under this Agreement will result in the Employee’s recognition of income for U.S. federal income tax purposes and shall be subject to tax and tax withholdings as appropriate.  On the delivery of Shares upon conversion of any RSUs, the Company will reduce the number of Shares to be delivered to the Employee by the amount of the taxes due (with the Shares valued at the mean between its high and low prices on the New York Stock Exchange Composite list (or such other stock exchange as shall be the principal public trading market for the Shares) on the date that the Shares are valued for purposes of reporting compensation for Federal income tax purposes).  The Company shall have the authority to make arrangements for payment of the Employee’s share of any employment/payroll taxes (including Federal Insurance Contributions Act taxes), whether imposition of such taxes occurs upon conversion of RSUs or at some other time.  In particular, the Employee authorizes the Company to withhold such taxes from any payroll or other payment or compensation owed to the Employee, subject to the limitations imposed under Section 409A of the Code.

 

SECTION 10.     Consent Requirement.  If the Company shall at any time determine that any consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the issuance or purchase of Shares or other rights hereunder, or the taking of any other action hereunder (a “Plan Action”), then no such Plan Action shall be taken, in whole or in part, unless and until such consent shall have been effected or obtained to the full satisfaction of the Company.  The term “consent” as used herein with respect to any action referred to in this Section 10 means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the Employee with respect to the disposition of Shares, or with respect to any other matter, which the Company shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made, (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies, and (iv) any and all consents or authorizations required to comply with, or required to be obtained under, applicable local law or otherwise required by the Company.  Nothing herein shall require the Company to list, register or qualify the Shares on any securities exchange.

   

  

  

  

   

SECTION 11.     Invalidity and Enforcement.  If any provision of this Agreement is deemed invalid or unenforceable, either in whole or in part, this Agreement shall be deemed amended to delete or to modify, as set forth in this Section, the offending provision or provisions and to alter the bounds of this Agreement in order to render it valid and enforceable.  The Company and the Employee specifically request that any court having jurisdiction over any dispute relating to this Agreement modify, if possible, any offending provision so that such provision will be enforceable to the maximum extent permitted by law.

 

SECTION 12.     No Entitlements.  This Agreement is not an employment agreement, and nothing in this Agreement or the Plan shall alter an Employee’s status as an “at-will” employee of the Company subject to the rights (if any) that the Employee may have under any employment agreement existing between the Company (or any subsidiary) and the Employee.

 

SECTION 13.     Enforcement by Successors and Assigns.  The Company and any of its successors or assignees may enforce the Company’s rights under this Agreement.

 

SECTION 14.     Entire Agreement.  Other than with respect to any existing nonsolicitation, non-competition, nonuse, and non-disclosure obligations of the Employee, this Agreement constitutes the entire agreement between the Company and the Employee regarding the RSUs.  No modification of this Agreement will have any force or effect unless such modification is in writing, signed by the Chief Executive Officer (or Vice President, Human Resources) of the Company and the Employee, and expressly indicates an intent to modify this Agreement.

 

SECTION 15.     Interpretation.  Any dispute, disagreement or matter of interpretation which shall arise under the Agreement shall be finally determined by the Compensation Committee in its absolute discretion.

 

SECTION 16.     Governing Law.  This Agreement and all rights hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the state of New York applicable to contracts made and to be performed entirely within such state (without reference to its principles of conflicts of law).  Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in state or federal court in New York City.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

   

  

  

  

     

SECTION 17.     Section 409A.  It is the intention and understanding of the parties that the provisions of this Agreement comply with the requirements of Section 409A of the Code.  This Agreement shall be interpreted and administered to give effect to such intention and understanding and to avoid the imposition on the Employee of any tax, interest or penalty under Section 409A of the Code in respect of the RSUs.  Notwithstanding any other provision of this Agreement, the Employee’s consent shall not be required for any amendment to this Agreement which, in the reasonable, good faith judgment of the Company, is necessary or appropriate to avoid the imposition on the Employee of any tax, interest or penalty under Section 409A of the Code.

 

SECTION 18.     Acknowledgements.  By accepting this Equity Award Agreement, the Employee agrees that he/she has received and reviewed a copy of:

 

(a)          the Prospectus (link to Prospectus:

http://questnet1.qdx.com/Business_Groups/Legal/policies/stock_option/stock_option.htm) relating to the Company’s Employee Equity Participation Program and;

 

(b)          the Quest Diagnostics Incorporated 2011 Annual Report on Form 10-K (link to 2011 Annual Report: http://www.sec.gov/Archives/edgar/data/1022079/000093041312000949/0000930413-12-000949-index.htm)

 

(c)          the Company’s Policy for Purchasing and Selling Securities (the “Policy”) (link to Trading Policy:  http://questnet1.qdx.com/Business_Groups/Legal/policies/policies.htm).  The Employee further agrees to fully comply with the terms of the Policy; and

 

(d)         the Eligibility Policy.Exhibit 10.3

 

FORM OF RESTRICTIVE COVENANT AGREEMENT

This Agreement dated ______________ is by and between Quest Diagnostics Incorporated (“Quest Diagnostics”), a Delaware corporation with its principal place of business at 3 Giralda Farms, Madison, New Jersey and ___________  (“the Employee”).

WHEREAS, the Employee is employed in a senior position with Quest Diagnostics; and

WHEREAS, Quest Diagnostics deems it essential to the protection of its confidential information and competitive standing in its market to have its senior leadership have reasonable restrictive covenants in place; and

WHEREAS, the Employee agrees and acknowledges that Quest Diagnostics has a legitimate interest to protect its confidential information and competitive standing; and

WHEREAS, the Employee agrees and acknowledges that these interests are best protected through a signed agreement.

NOW THEREFORE, in consideration for the provisions stated below, and intending to be legally bound thereby, the parties agree as follows.

1.           The Employee has been informed and is aware that the execution of this Agreement is a necessary term and condition of the Employee’s employment, or continued employment.

2.           The Employee recognizes and acknowledges that during his or her employment with Quest Diagnostics, the Employee may be given access to and/or may develop Confidential Information.  The Employee shall not use or disclose (directly or indirectly) any Confidential Information (whether or not developed by the Employee) at any time or in any manner, except as authorized and required in the course of employment with Quest Diagnostics.  The Employee shall not disclose to Quest Diagnostics or use on behalf of Quest Diagnostics any Confidential Information obtained from any former employer or any other third party.  All documents and things embodying Confidential Information, whether prepared by the Employee or otherwise coming into the Employee’s possession, are the exclusive property of Quest Diagnostics, and must not be removed from any of its premises except as required in the course of employment with Quest Diagnostics.  All such documents and things shall be promptly returned by the Employee to Quest Diagnostics upon the request of Quest Diagnostics and on any termination of employment with Quest Diagnostics.  The Employee will not remove any Confidential Information such as documents or things or retain them in whole or part in any manner.  The Employee shall ensure that any export of Confidential Information undertaken by the Employee or with his/her knowledge or approval shall be in compliance with all applicable laws.

 

3.           The Employee shall promptly disclose to Quest Diagnostics all Confidential Information which the Employee creates, conceives, develops, or improves (either alone or with others) referred to below as a “Creation” while in the employment of Quest Diagnostics, if the Creation either:  (1) relates to any actual or demonstrably contemplated business, or research or development project, of Quest Diagnostics or its subsidiaries, or to any reasonable extension or variation thereof; or (2) results from any work performed by the Employee for Quest Diagnostics; or (3) was created utilizing any of Quest Diagnostics’s equipment, supplies, facilities, time, or Confidential Information.

 

  

  

  

 

The Employee shall keep complete, accurate, and authentic records on all Creations in the manner and form requested by Quest Diagnostics.  The Employee shall promptly disclose to Quest Diagnostics, in confidence, all patent, copyright, and trademark applications filed by the Employee within one (1) year after termination of employment with Quest Diagnostics and which relate to any field in which the Employee worked at Quest Diagnostics.  The Employee agrees that any such application for a patent, copyright registration, trademark registration, mask work registration, or similar right filed within one (1) year after termination of employment with Quest Diagnostics shall be presumed to relate to a Creation of the Employee created during employment at Quest Diagnostics, unless the Employee can prove otherwise.

 

4.           The Employee hereby assigns to Quest Diagnostics all of the Employee’s rights in all of the above-described Creations.  All such Creations that are subject to copyright or mask work protection are explicitly considered by the Employee and Quest Diagnostics to be works made for hire to the extent permitted by law.  To the extent that any such Creations are subject to copyright protection and are not works made for hire, any and all of the Employee’s copyright and mask work interest therein are hereby assigned by the Employee to Quest Diagnostics, and are the exclusive property of Quest Diagnostics.

 

5.           The Employee agrees to assist Quest Diagnostics in obtaining and/or maintaining patents, copyrights, trademarks, mask work rights, and similar rights to any Creations assigned by the Employee to Quest Diagnostics, if and to the extent that Quest Diagnostics, in its sole discretion, requests such assistance, the Employee shall sign all documents and do all other things deemed necessary by Quest Diagnostics, at Quest Diagnostics’s expense, to obtain and/or maintain such rights, to provide confirmatory evidence of the Employee’s assignment of such Creations to Quest Diagnostics, to defend them from invalidation, and to protect them against infringement by other parties.  The obligations of this paragraph are continuing and survive the termination of the Employee’s employment with Quest Diagnostics.  The Employee irrevocably appoints the Chief Executive Officer of Quest Diagnostics (with powers of delegation) to act as the Employee’s agent and attorney-in-fact to perform all acts as the Employee’s agent and to file, prosecute, and maintain applications and registrations for patents, trademarks, copyrights, mask work rights, and similar rights to any Creations assigned by the Employee to Quest Diagnostics under this Agreement, such appointment being effective both during the Employee’s employment by Company, and thereafter if the Employee (1) refuses to perform those acts, or (2) is unavailable, within the meaning of any applicable laws.  The Employee acknowledges that the grant of the foregoing power of attorney is coupled with an interest, is irrevocable, and shall survive his/her death or disability.

 

6.           During his/her employment with Quest Diagnostics and for a period of two (2) years following the date of the Employee’s termination of employment for any reason, the Employee will not provide services, in any capacity, whether as an employee, consultant, independent contractor, or otherwise, in any country in which Quest Diagnostics conducts business at any time to any person or entity that provides products or services that compete with the Business of Quest Diagnostics, including but not limited to the companies listed on Annex A and such additional persons or entities that provide products or services that compete with the Business of Quest Diagnostics as Quest Diagnostics may communicate in writing from time to time; and their subsidiaries or their successors or assigns.

 

7.           During his/her employment with Quest Diagnostics and for a period of two (2) years following the termination of the Employee’s employment for any reason, the Employee will not directly or indirectly solicit the Business of any customer of Quest Diagnostics of whom the Employee acquired knowledge and/or had direct or indirect contact during the one (1) year period prior to the termination of Employee’s employment relationship with Quest Diagnostics for any purpose other than to obtain, maintain and/or service the customer’s Business for Quest Diagnostics.

 

8.           During his/her employment with Quest Diagnostics and for a period of two (2) years following the termination of the Employee’s employment for any reason, the Employee agrees not to, directly or indirectly, recruit or solicit any employees of Quest Diagnostics to work for the Employee or any other person or entity.

 

  

2

  

 

9.           As used in this Agreement, the following terms shall have these respective definitions:

 

9.1           “Business” shall include the Current Business; and any other product or service which Quest Diagnostics provided during the one-year period prior to Employee’s termination of employment and during the one (1) year period following Employee’s termination of employment, but the restriction on products and services introduced after Employee’s termination of employment shall exclude products and services that were not planned, discussed or contemplated prior to Employee’s termination of employment.

 

9.2           “Current Business” shall mean and include:  providing clinical testing information products or services for the diagnosis, monitoring and treatment of disease; providing clinical laboratory management services; providing medical informatics services (i.e., the statistical analysis of medical information) and consulting services based on such analysis; providing data analysis, medical information services and database management services for the health care industry; providing clinical testing information services and other services in support of clinical trials, and clinical testing products for use in clinical trials; providing services of storage, retrieval and communication of medical information via interactive computer networks; providing to managed care organizations, hospitals, employers and other institutional healthcare providers, access to a network of clinical diagnostic laboratories; providing services of processing requests for diagnostic tests, performing tests, reporting test results, and paying claims to network laboratories; providing quality and utilization management; providing consolidated chronological reports in graphical and/or numerical form, representing the results of clinical diagnostic tests performed on individual patients and groups of patients over monitored periods of time, together with analysis of the results; and manufacturing and selling clinical diagnostic assay kits, apparatus and reagents.

 

9.3           “Indirectly solicit” shall include, but are not be limited to, providing Company’s Confidential Information to another individual, or entity, allowing the use of Employee’s name by any company (or any employees of any other company) other than Quest Diagnostics, in the solicitation of the Business of Company’s customers.

 

9.4           “Confidential Information” shall mean all ideas, inventions, data, databases, know-how, processes, methods, practices, specifications, raw materials and preparations, compositions, designs, devices, fabrication techniques, technical plans, algorithms, computer programs, protocols, client information, medical records, documentation, customer names and lists, supplier names and lists, price lists, supplier names and lists, apparatus, business plans, marketing plans, financial information, chemical and biological reagents, business methods and systems, literary and graphical and audiovisual works and sound recordings, mask works, computer programs, and the like, and potential trade names, trademarks, and logos, in whatever form or medium and which have commercial value, and whether or not designated or marked “Confidential” or the like, which the Employee learns, acquires, conceives, creates, develops, or improves while employed by Quest Diagnostics and which (1) relate to the past, current, or prospective business of Quest Diagnostics or its subsidiaries and (a) which have not previously been publicly disclosed without restrictions on use by Quest Diagnostics, or (b) which Employee knows or has good reason to know are not generally publicly known; or (2) are received by Quest Diagnostics from a third party under an obligation of confidentiality to the third party which the Employee knows or reasonably should have known are confidential to such third party.  “Confidential Information” shall not include any information known generally to the public (other than as a result of an unauthorized disclosure by the Employee).

 

  

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10.           If so requested in writing by the Employee, Quest Diagnostics shall advise the Employee promptly in writing in advance (but in no case later than thirty (30) calendar days) as to whether, in the exercise of its reasonable discretion, Quest Diagnostics views any proposed activity contemplated by the Employee as constituting a competing “Business.”

 

11.           The Employee acknowledges that, in the event of the termination of his/her employment with Quest Diagnostics for any reason, the Employee will be able to earn a livelihood without violating the restrictions contained in this Agreement, and that the Employee is able to earn a livelihood without violating any such restrictions.

 

12.           Each covenant set forth in this Agreement shall be construed to be separate and distinct from every other covenant set forth herein.  In the event that any court shall declare any of such covenants to be invalid, then the remaining covenants and obligations shall be deemed independent, divisible and enforceable.  It is further agreed that the inclusion of the covenants as specified in this Agreement are reasonable and necessary.  If any provision of this Agreement is held to be unenforceable because of the scope of such provision, the court making such determination shall have the power to modify the terms of such provision(s) and said provision shall then be enforceable.

 

13.           The Employee agrees that the conduct of any activities prohibited by this Agreement will be a breach of his/her business relationship with Quest Diagnostics and will result in substantial irreparable injury to Quest Diagnostics, and that Quest Diagnostics may not be adequately compensated at law for such breach.  Accordingly, the Employee consents to entry of injunctive or other appropriate relief against the undersigned with respect to any such breach or threatened breach, without bond or security.  In the event that a Court determines that the Employee has breached this Agreement, the parties agree that the Employee shall reimburse Quest Diagnostics for all attorneys fees and costs incurred in enforcing the terms of the Agreement, as well as any other damages permitted by law.  The Employee also agrees that he/she will be enjoined from violating the provisions of paragraphs 2 and 3 for an additional two-year period should a court determine that those provisions were breached by the Employee.

 

14.           This Agreement shall be governed by and construed under New Jersey law, and shall inure to benefit and may be enforced by Quest Diagnostics, its successors or assigns, and shall be binding upon the undersigned and their successors and assigns.  The Employee irrevocably and unconditionally agrees that all actions or proceedings relating to or arising from this Agreement will, without exception, be litigated and tried only in Superior Court, Morris County, New Jersey..  Employee submits to the exclusive jurisdiction of this court for the purpose of any such action or proceeding (including, without limitation, any action initiated by Employee, including but not limited to any declaratory judgment actions) and this submission cannot be revoked.  Employee acknowledges and agrees that he/she has more than sufficient means to litigate any and all actions, proceedings or disputes arising from this Agreement before the aforementioned Court. Employee agrees that the aforementioned Court will be the most convenient forum in which to resolve any and all actions, proceedings or disputes arising from this Agreement.

   

15.           In order to waive (i.e., relinquish any rights) or modify any part of this Agreement, both Quest Diagnostics and the Employee must sign a written document expressly indicating their intention to waive or modify the specified provisions of this Agreement.  If Quest Diagnostics chooses not to enforce its rights in the event the Employee breaches some or all of the terms of this Agreement, Quest Diagnostics’s rights with respect to any such breach shall not be considered a waiver of a future breach by the Employee of this Agreement, regardless of whether the breach is of a similar nature or not.

 

  

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16.           This Agreement accurately sets forth and entirely sets forth the understandings reached between the Employee and Quest Diagnostics.  If there are any prior written or oral understandings or agreements pertaining to the subject matter addressed in this Agreement, they are specifically superseded by this Agreement and have no effect.  This Agreement is binding on the Employee and Quest Diagnostics, and our respective successors, assigns and representatives.

 

IN WITNESS WHEREOF, Quest Diagnostics and the Employee have executed this Agreement on the date(s) noted next to their respective signatures.

Quest Diagnostics Incorporated

 

 

	By:	 	 	 
	 	Vice President, Human Resources	 	[Signature of Employee] / Date

 

 

 

 

 

 

 

 

 

 

 

  

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Annex A

[List entities]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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