Preview of our top selling Outsourcing and Secondment Employee Services Agreement
Concentric - EMPLOYEE SERVICES AND STAFFING AGREEMENT
EXHIBIT 10.11
TECHNOLOGIES
EMPLOYEE SERVICE
AND STAFFING
EMPLOYEE SERVICES AND STAFFING AGREEMENT
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THIS EMPLOYEE SERVICES AGREEMENT (THIS "Agreement"), dated as of this 1st day of November, 1995, by and among Concentric Network Corporation ("CNC"), a Florida corporation, with principal offices at 10590 N. Tantau Avenue, Cupertino, CA 95014, and Critical Technologies Incorporated, ("CTI"), with principal offices at 3324 Hollenberg Drive, Bridgeton, MO 63044, a Missouri Corporation.
W I T N E S S E T H
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WHEREAS, CTI has performed network analysis and support services to CNC and has assisted CNC with the planning and implementation of Points of Presence ("POPs") deployment; and
WHEREAS, CTI presently provides certain services to CNC including network modeling and Point of Presence (POP) selection pursuant to a certain Collocations Services Agreement between the parties, and the parties agree said agreement will be amended, modified, and extended in certain respects by this agreement; and
WHEREAS, CNC has determined that it is in the best interests of CNC to continue to involve CTI in the design, implementation and operation of virtual private and public networks that meet the needs of CNC's customers and to from a team to be comprised of employees of CTI and whom CTI will cause to be provided to CNC to facilitate said needs; and
WHEREAS, CNC is willing to reimburse CTI for the costs and related expenses, including administration of planning and implementing POPS, assisting network operations, implementing network improvements, including expanding capacity, and opening "Virtual Local Access" calling areas on the terms and conditions as herein provided; and
WHEREAS, CNC is also willing to compensate CTI's employees and principals by granting to certain employees and principals of CTI options to purchase shares of stock of CNC on the terms and conditions herein provided.
NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties contained herein, the parties hereto agree as follows.
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For purposes of this agreement, certain words and phrases are defined as follows. These definitions do not define the obligations of the parties and are only provided to assist the parties in understanding the contract.
(a) POP: "Point of Presence" is a local access network node on a network.
(b) Staff Month: One calendar month of staff time including sick time, weekends, holidays and vacation time. There are 12 such periods in each calendar year.
(c) Loaned Employee: An employee or principal of CTI, the services of which are utilized by CNC to facilitate the goals and purposes of this contract.
(d) "Local Access Network Engineering and Design Services" and "Local Access Network Design and Analysis": The modeling of traffic patterns and expenses to determine the most effective method for expanding and modifying a network's dial-in access nodes.
(e) Network Expansion Plan, Network Operations Plan and Software Development Plan: A series of mutually agreed upon objectives and goals that are exhibits to this contract.
(f) Existing POP Site Contract: The existing location management contract between CNC and CTI, titled Collocations Services Agreement, dated November 1, 1994, and attached as an exhibit to this contract.
(g) "Stretch" or "Performance" Objectives: A series of mutually agreed upon objectives and goals that are required to be aspired to by CTI, but the full performance of which is not warranted or guaranteed by CTI.
(h) Reasonably Attainable: Tasks that could be completed by a group of similar size and experienced individuals with the same capital flexibility allowed by CNC. Additionally, the sum total of activities must also be able to be completed by the group.
(i) Public Offering: The initial offering of CNC stock to the public at large, pursuant to SEC regulations. This is meant to be differentiated from a private placement to qualified investors.
(j) Provisioning: The process of contracting for the physical facility where a POP will be located and coordinating the telephone and other equipment orders necessary to bring this site live or into production use by the network.
(k) Co-locate: The ability of CTI to place equipment on a POP site which is owned by CNC. The concept being that both organizations can utilize the space which is owned or leased by CNC.
1. CTI'S RESPONSIBILITIES AND OBJECTIVES
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LOANED EMPLOYEES - ADDITIONAL RESPONSIBILITIES
(a) CTI hereby agrees to use its best efforts to provide certain key employees and principals of CTI, whose names are set forth on Exhibit A hereto (the "Loaned Employees"), to perform functions for CNC. The parties agree that CTI will provide 180 Staff Months of employee service over the two year term of this agreement.
Although each Loaned Employee shall at all times remain an employee of CTI, he or she will perform duties and be under the general direction of CNC for the term of this Agreement, or until such Loaned Employee's assignment is otherwise terminated as provided in Section 3 hereof. The Loaned Employees hereunder shall be located in St. Louis, Missouri, unless noted in Exhibit A.
The parties hereto agree that the position, title and salary with respect to each Loaned Employee are as set forth on Exhibit A hereto. Additionally, the parties agree that Exhibit A(l), also attached, sets forth the Stock Options which shall be granted to those Loaned Employees and certain other impacted employees and principals of CTI as provided in Paragraph 4(f)(ii) of this agreement. Exhibit A and A(l) hereto may be amended in writing from time to time by the parties hereto to add Loaned Employees to fill positions provided for under the Network Expansion Plan, Network Operations Plan and Interim Software Development Plan previously submitted by CTI to CNC, and any other plans submitted by CTI and agreed to by CNC. Copies of said Network Expansion Plan, Network Operations Plan, and Interim Software Development Plan, marked Exhibits C, E, and I respectively, are attached hereto and incorporated by reference as if fully set out herein. Exhibits A and A(l) may also be amended to reflect the termination of a Loaned Employee's assignment pursuant to Sections 3(a) and (c) hereof, to replace a Loaned Employee whose assignment is terminated pursuant to Section 3(e) of this Agreement, or to alter, amend or revise the title, salary and duties of any Loaned Employee.
The parties agree that certain employees of CTI shall be located in St. Louis, Missouri, and shall be responsible for the physical operation of the network. At present there are fifteen (15) Network Operators. Twelve (12) of said operators are CTI employees, the cost and expense of which are reimbursed by CNC to CTI. Three (3) of said operators are CTI employees, the cost and expense of which are borne by CTI.
CTI and CNC acknowledge that it is important for CNC to have long term control and ownership of the Network Operations function being performed, in part, by loaned CTI employees under this agreement. CTI and CNC further acknowledge that CTI has current and prospective customers for which a 24x7x365 day network operations infrastructure is required. The parties further acknowledge that in order to meet CNC's timetable for implementation of its new Network Operations function, CTI was utilized to hire staff and implement the technology necessary to provide CNC with a 24x7x365 day network operations function. To accomplish this objective, CTI recruited a number of people who had been identified as being members of the planned CTI network operations center.
In recognition of the facts that a) CTI had intended to build its own network operations center around some of the core staff hired by CTI to support CNC's requirements, b) CNC funded virtually all of the build out expense for the Network Operations Center in St. Louis as well as the monthly operating expense for this center, c) CNC requires the flexibility of controlling this function as a core asset of CNC, and d) CTI desires the ability to service non-CNC customers with its own dedicated staff plus some portion of the CNC staff, equipment, software, and other resources funded by CNC on an "as available" basis, the parties agree to the following terms with respect to the Network Operations staff and resources that are covered by this Agreement.
1) CNC shall have the right to hire any or all of the personnel
designated as Network Operations staff during the term of this
Agreement under the same terms and conditions as it has for hiring any
other loaned employee under the terms of this Agreement, with the
following exception:
If CNC hires any or all of the Network Operations staff, then CNC
agrees to follow CTI to utilize this staff for a period of 9
months (Transition Period), unless reduced or extended by mutual
agreement, from the date of hire to support the operation of
other non-CNC networks so long as the effort devoted to the non-
CNC networks does not impair the quality of service or support
provided to CNC.
2) CTI will reimburse CNC for a proportionate share of the costs of a)
loaned CTI employees, b) CNC employees who have been converted from
CTI-to-CNC employment, and c) supporting resources that have been or
are being paid for by CNC when these people or supporting resources
are used to support non-CNC customer networks. The amount of
reimbursement will be computed as TCxAC1-(AC1 +C2):
NOTE: A negative result, product, or sum will not result in
payment to CTI.
TC = Monthly expense paid to CTI for Network Operations loaned
employees, plus Monthly expenses of any/all CNC hired Network
Operations employees, plus Monthly amortization/depreciation (48
months) of the Network Operations capital equipment, software,
and site preparation expenses paid for by CNC, plus any other
expenses associated with Network Operations paid for by CNC.
Cl = Total number of help/trouble calls taken by Network
Operations from Non-CNC customers.
C2 = Total number of help/trouble calls taken by Network
Operations from CNC customers.
CP = Calls per employee (Total calls divided by total of Network
Operations personnel paid for by CTI and CNC).
NR = Number of CTI Network employees not reimbursed by CNC.
AC1 = Cl-(NRxCP).
3) During the Transition Period, CTI and CNC acknowledge that CNC
employees will be working side-by-side with CTI employees in St. Louis
and will be performing the same or similar tasks. Because of this, it
is in the best interests of both CTI and CNC that the employees be
treated in as equivalent a fashion as possible with respect to
compensation, benefits, and working hours/rules. CTI and CNC agree to
develop an appropriate employee transition plan upon hiring by CNC of
any St. Louis based Network Operations loaned employees to achieve
these objectives.
(b) Loaned Employees who will be made available to CNC will be available only after they have executed Letters of Agreement in the form attached hereto as Exhibit B, which form the parties hereto expressly approve.
(c) The parties hereby acknowledge and agree that Intellectual Property Rights, as defined in Exhibit C, created, written, developed or made by each Loaned Employee while performing services for CNC pursuant to this Agreement shall be subject to the addendum to the Loaned Employee Letter of Agreement (Exhibit B).
(d) In addition to the other terms and conditions of this contract, CTI and CNC agree and stipulate, as further consideration for the promises made by each party hereunder, as follows:
(1) CTI will use its best efforts to ensure the successful and timely implementation of the Intuit contract. Additionally, CTI will use its best efforts to ensure that the network performance achieved will be sufficient to attract and retain new customers.
(2) CTI Principal Matthew W. Bross will be available on a part- time basis to ensure overall management of the project. Matthew W. Bross will contribute a minimum of 80% of his working time between the signing of this document and the end of 1995, and then a mutually agreed upon level of effort thereafter.
(3) CTI will use its best efforts to ensure that a properly trained network control center is developed in St. Louis, MO. This will include developing the staffing requirements, interviewing and hiring the staff, and training the staff as required.
(4) CTI will allow CNC to hire any of the CTI personnel associated with this project that CNC wishes at any time during the project, as set forth in Section 6 of this agreement.
(5) CTI will use its best efforts to assist CNC in locating other revenue generating co-location network opportunities.
2. AGREEMENT SCOPE AND TERM
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The term of this agreement shall be for a period of twenty-four (24) months, commencing November 1, 1995, and terminating October 31, 1997. The parties agree that this agreement may be terminated prior to the expiration of 24 months by the mutual, written consent of both parties. Such 24 month period referred to herein shall be referred to as the "Agreement Term". Said two (2) year period shall automatically renew for an additional two-year period unless either party shall give one-hundred twenty (120) days notice prior to the expiration of this contract to the other party that said party does not wish to extend the terms of this contract.
3. TERMINATION OF ASSIGNMENTS
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A Loaned Employee's assignment to CNC may be terminated by CTI for the following reasons:
(a) Termination of Employment with CTI. In the event a Loaned
---------------------------------- Employee's employment with CTI terminates for any reason, the Loaned Employee's assignment to CNC hereunder shall also terminate. Nothing in this Agreement shall require CTI to retain the Loaned Employee in its employment for any period of time, and CTI shall be free to terminate any Loaned Employee at any time during the term of this agreement.
(b) Payments Due Upon Termination of Loaned Employee's Assignment.
------------------------------------------------------------- Upon the termination of the assignment of a Loaned Employee, CNC shall reimburse CTI for any amount which had accrued and remains unpaid as of the date such assignment terminated and for which CTI is entitled to reimbursement under Section 4(f) below. CNC shall make any payments due under this subsection (b) in accordance with said Section 4(f).
(c) Replacement of Loaned Employees. In the event a Loaned
------------------------------- Employee's assignment is terminated pursuant to Section 3(a) above, unless the position held by the Loaned Employee has been eliminated, CTI shall select a replacement employee who will become a Loaned Employee for purposes of this Agreement.
4. CNC'S OBLIGATIONS - COMPENSATION, BENEFITS AND OTHER HUMAN RESOURCE
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PLANS AND PROGRAMS, REIMBURSEMENT OF EXPENSES, AND GRANT OF STOCK
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(a) Loaned Employees Generally. Except as otherwise set forth below
-------------------------- in Section 4(d), there shall be no change, from the date of this contract, in the amount, terms and conditions of CTI's compensation, benefit and other Human Resource ("HR") plans and programs as they relate to the Loaned Employees during the term of this agreement without consultation with and the written consent of CNC, except such changes as may be made in the ordinary course of business consistent with CTI's past practices.
(b) Base Salary. CTI shall continue to compensate each of the Loaned
----------- Employees for his or her services to CNC under the terms of this Agreement at the rate per annum as specified in Exhibit A and as adjusted annually in accordance with the next sentence, plus overtime and bonuses, if any, ("Base Salary Rate"), less appropriate deductions (including withholding taxes and deductions for participation in benefit programs), and in accordance with CTI's general payroll practices. Any increase in such Base Salary Rate may be made at the sole election of CTI, taking into account any recommendation of CNC made from time to time, as appropriate.
(c) Benefits and Perquisites. Each Loaned Employee shall be eligible
------------------------ to continue in, or receive benefits under the benefits plans, arrangements, practices, and programs made available from time to time to similarly situated employees of CTI, subject to, and on a basis consistent with, the terms of such plans, arrangements, practices, and programs.
(d) Incentive Compensation. Each Loaned Employee may be considered
---------------------- for participation in any incentive compensation, deferred compensation or bonus arrangement, plan, policy and practice of CTI during the Agreement Term in the sole discretion of CTI, subject to and on a basis consistent with the terms of any such arrangement, plan, policy, and practice.
(e) Reimbursement of Loaned Employee Expenses. During the Agreement
----------------------------------------- Tenn, CNC shall reimburse CTI for all reasonable ordinary and necessary out-of- pocket employment related expenses of all Loaned Employees, including, but not limited to travel, meals, lodging, mileage, moving expenses, telephone calls, out-of-pocket advances made by the Loaned Employee on behalf of CNC, and any other reasonable employment related expense, including any personal income tax liability that is a direct result of relocating. This provision shall also include all network operations employees hired in St. Louis, Missouri.
(f) Reimbursement of CTI, Share Options
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(i) During the Agreement Term, CTI shall invoice CNC monthly for one-twelfth (1/12) of the annual compensation, benefits and administrative costs incurred by CTI with respect to the Loaned Employees, as determined by CTI, and CNC shall pay such amount to CTI in accordance with its normal payment practices, but in no event later than thirty (30) days following
receipt of such invoice for such amount. Any discrepancies between amounts billed and paid and actual costs incurred by CTI shall be reconciled and paid promptly following the end of the relevant calendar year. CNC shall have the right to audit, at CNC's expense, CTI's said costs and billings once annually in connection with and at the time of such reconciliation. CNC shall be responsible for reimbursement of the following: Loaned Employees' salaries, FICA, state and federal unemployment tax, worker's compensation insurance premiums and deductibles, medical/health insurance premiums and dental insurance premiums, including coverage for spouses and family, long-term disability insurance premiums, life insurance premiums, seminars and training costs related to Network Operations, local and long distance travel expenses, pagers. CNC shall be responsible for reimbursement of other costs or expenses which CNC deems reasonable and necessary.
CNC shall also pay to CTI, as reimbursement, an amount equal to [*] of the
expenses set forth above, for reimbursement of the general administrative
expenses incurred by CTI in providing said Loaned Employees. Said [*] payment
shall also be made monthly on the same terms and conditions as set forth above,
and shall be based upon the amount billed each month by CTI to CNC.
CNC shall also reimburse CTI for the direct costs of Network Operation. CNC shall reimburse CTI, on a monthly basis, for office rent, electricity, telephone service, including base service and long distance, necessary office furniture and equipment, ongoing network communications cost, software, insurance, and any other direct, necessary expense.
(ii) CNC shall grant to certain employees and principals of CTI, at CTI's direction,"options" to purchase Class A stock of CNC pursuant to Option Agreements substantially in the form of Exhibit G hereto. CNC shall enter into an Option Agreement with all recipients hereunder (optionees), in said form as attached Exhibit G. The price, time of grant, number of shares, type of stock, recipients of grants, and vesting of the Options shall be as follows:
(a) PRICE - The Options shall be granted to the recipients by CNC
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with an exercise price of Twenty-five cents ($.25) per share of
common stock.
(b) TIME OF GRANT - The Options shall be granted by CNC on the
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date of execution of this contract, or within ten (10) days
(c) NUMBER OF SHARES - CNC shall grant to the designated
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recipients Options to purchase a total of Nine Hundred Thousand
(900,000) shares of CNC Class A common stock. (The "Option
Shares"). CNC
- --------------------
[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
warrants and represents that it shall provide said 900,000 shares
to the Optionees under the agreement.
(d) TYPE OF STOCK - The Options will be to purchase Class A
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common stock of CNC. CNC agrees to file, by the date the lock-up
period described in (e) below expires, a registration statement
on Form S-8 registering such shares, so that any such shares
shall be freely tradeable upon issuance which contain no
restrictions whatsoever restricting the sale of said stock on the
open market after such time as CNC makes an initial public
(e) RECIPIENTS OF GRANTS - The specific employees and principals
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of CTI to whom said Options shall be granted are set forth in
Exhibit A-l, attached hereto and incorporated by reference herein
and made a part of this contract. Said grants shall be made
directly to the designated recipients as set forth in said
Exhibit and shall be evidenced by an Option Agreement in CNC's
standard form. Each Optionee shall agree not to sell or
otherwise dispose of any shares issued upon exercise of the
Option for a period of up to 180 days following the effective
date of CNC's registration statement relating to CNC's initial
public offering, such period to be determined by CNC and the
underwriters. CNC warrants and represents that all other
employees who have been granted Options under the plan, Optionees
and stockholders of CNC stock are bound by a similar 180 day
provision. If CNC grants to any such employee Option holders,
the right to include shares issuable upon exercise of Option in a
registered offering (other than the Form S-8 registration
statements described in (d) above) prior to the effective date of
the Form S-8 registration statement to sell or dispose of any
portion of their shares during the period determined by CNC and
underwriters mentioned above, then the Optionees of CTI under
this agreement shall be granted the right to sell or dispose of
their shares in proportionate include in such registration the
same percentage of shares issuable upon exercise of the Options
equal to the percentage of shares held by other Optionees and
included in such registration amounts as
compared to the total Option Shares issued on the effective date
of CNC's registration statement.
(f) VESTING - Subject to the provisions of Section 5, the Options
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will vest, and may be exercised, in whole or in part, as follows:
(1) Seven Hundred Thousand (700,000) of said Option Shares
shall vest ratably over twelve (12) months, at the end of
each month based on the Optionee's continued employment with
CTI, and
(2) Two Hundred Thousand (200,000) of the Options, to be
referred to as the "Performance Shares", will vest ratably
over twelve (12) months at the end of each month subject to
repurchase at the exercise price by CNC in the event certain
performance objectives set forth in Exhibit D have not been
achieved within the twelve (12) month period. If at the end
of said twelve (12) month period, said performance
objectives have not been substantially completed,
unexercised options to purchase Performance Shares shall
terminate and any Performance Shares acquired on exercise of
an Option shall be sold back to CNC by the person exercising
such Options at the price of Twenty-five cents ($.25) per
(3) Regardless of any provision herein, all Options shall
fully vest on the date of an Initial Public Offering of
stock by CNC.
(4) In the event CNC shall merge with any entity, or shall
be acquired by any entity, or in the event of a change in
control or ownership of CNC, all
Options granted hereunder shall become fully vested on date
said merger, acquisition, or changes in control or ownership
becomes effective. In the event CNC shall not be the
survivor of any merger, acquisition, change in ownership or
change in control, then CNC hereby agrees to place a
provision in its merger or acquisition contract with the
acquiring or surviving entity which requires the acquiring
or surviving entity either to assume such option or to
compensate the optionees under this agreement for the value
of the stock of CNC which the optionees would have received
under this agreement. If the Option is not assumed, the
provision shall require the surviving or acquiring entity to
pay to the respective optionees, in cash, or in the form of
stock of the acquiring or surviving entity, an amount equal
to the amount which the total, vested shares of CNC stock
held by all optionees hereunder represent in relation to the
total price paid for CNC by any acquiring or surviving
entity on the date CNC is acquired, merges with another
entity, or undergoes a change in control or ownership. To
illustrate, all parties agree that the following example
accurately expresses the intention of this provision in the
event the Options are not assumed:
In the event CNC is acquired by, or merges with another entity, and the
total price paid by the acquiring or surviving entity to obtain CNC,
considering all forms of compensation, is "X', and further considering that
all the vested stock options of CNC held by all optionees hereunder on the
date of the acquisition or merger is "Y", and further considering that if
"Y" represents "Z" percentage of the total value of all stock of CNC which
is valued at "X", then the acquiring or surviving entity shall pay to the
optionees hereunder an amount equal to "Z" of the purchase price of CNC
("X"), in amounts as directed by CTI. Said payment shall be in the form of
stock of the acquiring or surviving entity or in the form of cash, said
form of payment to be chosen by the acquiring or surviving entity. If stock
is chosen as a method of payment, said stock shall
be Class A common stock with no restrictions on the sale or transfer of
said stock whatsoever other than restrictions which would apply to all
shareholders of CNC receiving stock in the merger.
Said provision, as illustrated above, shall be a part of any acquisition or merger contract with any acquiring or surviving entity entered into by CNC. Furthermore, CTI shall have the right to review the terms of said provision prior to the execution of the acquisition or merger contract by CNC.
(5) Attached hereto as Schedule I and incorporated herein by
reference are certain additional covenants and agreements of
the parties with respect to the grant and exercise of
Options hereunder.
(iii) Representation Concerning Capital Structure of CNC,
--------------------------------------------------- Financial Statements. CNC has delivered to CTI the [consolidated] balance sheet - -------------------- of CNC [and its subsidiaries] as of November 30, 1995, and the related [consolidated] statement of income for the 11 months then ended, and for CNC's most recent fiscal year ended December 31, 1994. CNC represents that the authorized capital stock of CNC consists of 100, 150,358 shares of common stock, par value one (1) cent per share [and 70 million shares of preferred stock, par value one (1) cent per share], of which 32,801,220 shares [and 13,596,788 shares, respectively,] have been issued and are outstanding. CNC has not granted any options, warrants or other rights to acquire shares of capital stock or other equity securities of CNC, whether upon conversion of other securities or otherwise, except as disclosed on Schedule 2 hereto (which Schedule includes information concerning exercise price, conversion ratio and other information sufficient to disclose the value to be received by CNC upon exercise of such options, warrants or rights or conversion of such convertible securities).
5. OPTION TERMS AND PROVISIONS
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(a) Subject to the terms of Section 5(c), the Options may be exercised only by the optionee during the period ending 10 years following the date of this contract. The Options may be exercised, in whole or in part, by written notice (in the form attached as Exhibit F) stating the election to exercise the Option and the total number of shares under the Option being exercised. Such notice of exercise shall be signed by optionee and delivered, accompanied by payment of the exercise price, to CNC. The Options shall be deemed exercised upon receipt by CNC of such written notice accompanied by the exercise price. For income tax purposes, shares of common Stock issued upon exercise of the Options shall be considered transferred on the date of exercise of the Option. If CNC reasonably determines that it is required to pay withholding taxes as a result of any exercise, the Optionee shall be required to pay to CNC the amount of such withholding taxes as a condition to the Optionee's right to exercise the Option.
(b) Payment of the exercise price shall be made by any of the following, or a combination thereof, at the election of the holder of the Option: (i) cash, (ii) personal check, (iii)cashier's check, or (iv) money order.
(c) The Options shall not be transferable.
(d) In the event of the death of any recipient to whom an Option shall have been transferred, the Option may be exercised at any time within 12 months following the date of the recipient's death (but in no event later than 10 years after the date of this contract), by such recipient's estate or by his or her heirs or legatees. Said Option shall cease to vest in the event of death of any recipient.
(e) In the event of termination of employment of a recipient, to whom an Option Share shall have been transferred, as a result of his or her disability, such recipient may, but only within 12 months of such termination (and in no event later than 10 years after the date hereof), exercise the Option to the extent the Option is vested as of the termination date.
6. CHANGE IN STATUS OF LOANED EMPLOYEE
-----------------------------------
(a) At any time during the Agreement Term or upon termination of this Agreement, CNC may, at its sole option, offer permanent employment to any Loaned Employee, upon terms and conditions agreed upon by CNC and such Loaned Employee. If such Loaned Employee accepts CNC's offer of employment, such Loaned Employee's employment with CTI shall terminate on a date mutually agreed upon by CTI and the Loaned Employee and CTI shall pay the terminating Loaned Employee all salaries and benefits due through such termination date (which amounts shall be reimbursed by CNC pursuant to Section 4(f) hereof). In the event a Loaned Employee shall become a CNC employee as provided hereunder, any time said employee spends during the term of this contract working for CNC toward the goals of CNC under this contract shall be counted as "staff months" in favor of CTI in calculating the "Staff Months" pursuant to Section l(a) of this contract. Additionally, all time spent by Shelley Mortimer, Timothy Hood, and Tony Zeis toward the goals of this contract shall also be counted toward the "Staff Months" regardless of the fact that said persons are employees of CNC.
(b) If an Optionee becomes an employee of CNC, his or her Options shall continue to vest according to the terms herein.
If the employee later returns to the employment of CTI during the term of this contract, the previous change in employment status shall not affect the vesting rights of that employee with respect to the Options, and he or she shall be treated as if he or she had never left CTI's employ for stock vesting purposes.
7. AGENCY AND AUTHORITY
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The Loaned Employees shall remain, and shall be advised by the parties that they will at all times during the Agreement Term, continue as employees of CTI; provided, that notwithstanding anything to the contrary contained in this Agreement, CTI or any Loaned Employee may, at any time, with or w...
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