EMPLOYMENT AGREEMENT
This Agreement, effective January 1, 1999, is among Western Staff Services
(USA), Inc., a California corporation ("Western"), Western Staff Services, Inc.
("WSS"), a Delaware corporation, and Xxxxxxx X. Xxxxxxx ("Xxxxxxx"). Western
and Xxxxxxx agree to the following terms and conditions of employment and WSS
and Xxxxxxx agree to the following grant of stock options.
1. Period of Employment.
(a) Basic Term. Western shall continue to employ Xxxxxxx to render services to
Western in the position and with the duties and responsibilities described in
Section 2 for the period (the "Period of Employment") commencing on the
effective date of this Agreement and ending upon the earlier of (i) December 31,
2003 (the "Term Date"), as, and to the extent, extended under Section 1(b); or
(ii) the date upon which the Period of Employment is terminated in accordance
with Section 4.
(b) Renewal. The parties agree that no later than the end of the fourth (4th)
year of this agreement, they will enter into discussions regarding possible
extension of the period of employment provided for herein. Nothing stated in
this Agreement or represented orally or in writing to either party shall create
an obligation to renew this Agreement.
2. Position and Responsibilities.
(a) Position. As of the effective date of this Agreement, Xxxxxxx accepts
employment with Western as its President and Chief Executive Officer and shall
perform all services appropriate to that position, as well as such other
services as may be reasonably required by Western's Board of Directors. Xxxxxxx
shall devote his best efforts and full-time attention to the performance of his
duties. Xxxxxxx shall be subject to the direction of Western, which shall
retain full control of the means and methods by which he performs the above
services and of the place(s) at which all services are rendered. Xxxxxxx shall
be expected to travel if necessary or advisable in order to meet the obligations
of his position.
(b) Other Activity. Except upon the prior written consent of Western, Xxxxxxx
(during the Period of Employment) shall not (i) accept any other employment; or
(ii) engage, directly or indirectly, in any other business, commercial, or
professional activity (whether or not pursued for pecuniary advantage) that is
or may be competitive with Western, that might create a conflict of interest
with Western, or that otherwise might interfere with the business of Western, or
any Affiliate. An "Affiliate" shall mean any person or entity that directly or
indirectly controls, is controlled by, or is under common control with Western.
3. Compensation and Benefits.
(a) Compensation. In consideration of the services to be rendered under this
Agreement, Western shall pay Xxxxxxx Three Hundred Seventy-Five Thousand Dollars
($375,000) per year, payable pursuant to the procedures regularly established,
and as they may be amended, by Western in its sole discretion, during the Period
of Employment. All compensation and comparable payments to be paid to Xxxxxxx
under this Agreement shall be less withholdings required by law.
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(b) Stock Options. On the first day of each of the four (4) fiscal years
commencing after October 30, 1999, Xxxxxxx shall receive a stock option for
One Hundred Thousand (100,000) shares of WSS common stock, provided that he
is employed by Western on the first day of the applicable fiscal year, as
follows: October 31, 1999, October 29, 2000, November 4, 2001 and November 3,
2002 for fiscal years 2000, 2001, 2002 and 2003 respectively. The exercise
price per share for each of these stock option grants shall be the average of
the fair market value per share of WSS common stock (Nasdaq National Market
closing price) on the first and last trading days of the fiscal year
completed immediately prior to the grant date of the option. Xxxxxxx'x stock
options shall not be exercisable until two (2) years from the last day of the
fiscal year for which they were granted; provided, however, that in the event
Xxxxxxx'x employment is terminated by Western without Cause pursuant to
Section 4(a), below, the vesting of each outstanding and issued stock option
referred to in this Section 3(b) shall accelerate and such stock options
shall be fully vested and exercisable with respect to all the shares subject
to such stock options in accordance with the terms of the written agreements
evidencing such stock options.
(c) Benefits. Xxxxxxx shall be entitled to vacation leave of four (4) weeks
per year, subject to Western's policies with respect to maximum annual accruals.
As Xxxxxxx becomes eligible, he shall have the right to participate in and to
receive benefits from all present and future benefit plans specified in
Western's policies and generally made available to similarly situated employees
of Western. The amount and extent of benefits to which Xxxxxxx is entitled
shall be governed by the specific benefit plan, as amended. Xxxxxxx also shall
be entitled to any benefits or compensation tied to termination as described in
Section 4.
(d) Expenses. Western shall reimburse Xxxxxxx for reasonable travel and other
business expenses incurred by Xxxxxxx in the performance of his duties, in
accordance with Western's policies, as they may be amended in Western's sole
discretion.
4. Termination of Employment.
(a) By Employer Not For Cause. At any time, Western may terminate Xxxxxxx for
any reason, without Cause (as defined in Paragraph 4(b) below), by providing
Xxxxxxx ninety (90) days' advance written notice. Western shall have the
option, in its complete discretion, to terminate Xxxxxxx at any time prior to
the end of such notice period, provided Western pays Xxxxxxx all compensation
due and owing through the last day actually worked, plus an amount equal to the
base salary Xxxxxxx would have earned through the balance of the above notice
period. In addition, if Xxxxxxx'x employment is terminated pursuant to this
Section 4(a), he shall also be paid one half (1/2) of the salary payments
remaining under the term of this Agreement, up to a maximum payment of one (1)
year's salary. The salary payments provided for herein shall be paid on a
monthly basis over the twelve (12) month period following the termination date,
provided that if Xxxxxxx does not comply with the provisions of Section 5(c) of
this Agreement, Westerns' obligation to continue to make salary payments under
this section shall cease immediately. Thereafter, all of Western's obligations
under this Agreement shall cease.
(b) By Employer For Cause. At any time, and without prior notice, Western may
terminate Xxxxxxx for Cause (as defined below). Western shall pay Xxxxxxx all
compensation then due and owing; thereafter, all of Western's obligations under
this Agreement shall cease. Termination shall be for "Cause" if Xxxxxxx: (i)
acts in bad faith and to the detriment of Western; (ii) refuses or fails to act
in accordance with any Western policy or any specific direction or order of
Western; (iii) exhibits in regard to his employment unfitness or unavailability
for service, unsatisfactory performance, misconduct, dishonesty,
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habitual neglect, or incompetence; (iv) is convicted of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any person; or (v)
breaches any material term of this Agreement.
(c) By Employee. At any time, Xxxxxxx may terminate his employment for any
reason by providing Western ninety (90) days' advance written notice. Western
shall have the option, in its complete discretion, to make Xxxxxxx'x termination
effective at any time prior to the end of such notice period, provided Western
pays Xxxxxxx all compensation due and owing through the last day actually
worked, plus an amount equal to the base salary Xxxxxxx would have earned
through the balance of the above notice period, not to exceed ninety (90) days;
thereafter, all of Western's obligations under this Agreement shall cease.
(d) Change in Employer Status. To the extent permitted by law, Western, in its
sole discretion, may terminate the Period of Employment (in which case all of
Western's obligations under this Agreement shall cease after payment of all
compensation due and owing, such as accrued vacation, earned but unpaid salary,
and expense reimbursements, if any) upon any formal action of Western's Board of
Directors to terminate Western's existence or otherwise wind up its affairs, to
sell all or substantially all of its assets, or to merge with or into another
entity.
(e) Termination Obligations.
(i) Xxxxxxx agrees that all property, including, without limitation, all
equipment, tangible Proprietary Information (as defined below), documents,
books, records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Xxxxxxx in the course of or
incident to his employment, belongs to Western and shall be returned promptly to
Western upon termination of the Period of Employment.
(ii) All benefits to which Xxxxxxx is otherwise entitled shall cease upon
Xxxxxxx'x termination, unless explicitly continued either under this Agreement
or under any specific written policy or benefit plan of Western.
(iii) Upon termination of the Period of Employment, Xxxxxxx shall be deemed
to have resigned from all offices and directorships then held with Western or
any Affiliate.
(iv) The representations and warranties contained in this Agreement and
Xxxxxxx'x obligations under this Section 4(e) on Termination Obligations and
Section 5 on Proprietary Information shall survive the termination of the Period
of Employment and the expiration of this Agreement.
(v) Following any termination of the Period of Employment, Xxxxxxx shall
fully cooperate with Western in all matters relating to the winding up of
pending work on behalf of Western and the orderly transfer of work to other
employees of Western. Xxxxxxx shall also cooperate in the defense of any action
brought by any third party against Western that relates in any way to Xxxxxxx'x
alleged acts or omissions while employed by Western.
5. Proprietary Information.
(a) Defined. "Proprietary Information" is all information, confidential data,
trade secrets and any idea in whatever form, tangible or intangible, pertaining
in any manner to the business of Western, or any Affiliate, or its employees,
clients, consultants, or business associates, which was produced by any
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employee of Western in the course of his or her employment or otherwise produced
or acquired by or on behalf of Western, including, but not limited to customers'
and employees' names, addresses and telephone numbers, xxxx and pay rates,
employees' pay and skills, other statistical information, sales techniques,
methods of operation, advertising materials, forms and operating manuals. All
Proprietary Information not generally known outside of Western, and all
Proprietary Information so known only through improper means, shall be deemed
"Confidential Information." Xxxxxxx should consult any Western procedures
instituted to identify and protect certain types of Confidential Information,
which are considered by Western to be safeguards in addition to the protection
provided by this Agreement. Nothing contained in those procedures or in this
Agreement is intended to limit the effect of the other.
(b) General Restrictions on Use. During the Period of Employment, Xxxxxxx
shall use Proprietary Information, and shall disclose Confidential Information,
only for the benefit of Western and as is necessary to carry out his
responsibilities under this Agreement. Following termination, Xxxxxxx shall
neither, directly or indirectly, use any Proprietary Information nor disclose
any Confidential Information, except as expressly and specifically authorized in
writing by Western.
(c) Competitive Activity. Xxxxxxx acknowledges and agrees that the pursuit
of the activities forbidden by this subsection would necessarily involve the
use or disclosure of Confidential Information in breach of the preceding
subsections, but that proof of such a breach would be extremely difficult.
To forestall this disclosure, use, and breach, and in consideration of the
employment under this Agreement, Xxxxxxx agrees that for a period of one (1)
year after termination of the Period of Employment, he shall not, directly or
indirectly, (i) divert or attempt to divert from Western (or any Affiliate)
any temporary staffing or employment services business or any business of any
kind in which it is engaged; (ii) employ or recommend for employment, whether
as regular staff or as a temporary employee, any person employed by Western
(or any Affiliate); or (iii) engage in any business activity that is or may
be competitive with Western (or any Affiliate) in any district, territory,
state or country where Western conducts its business, unless Xxxxxxx can
prove that any action taken in contravention of this subsection was done
without the use in any way of Confidential Information.
(d) Interference with Business. In order to avoid disruption of Western's
business, Xxxxxxx agrees that for a period of one (1) year after termination
of the Period of Employment, he shall not, directly or indirectly, (i)
solicit or attempt to divert any customer of Western (or any Affiliate),
known to Xxxxxxx at any time during his employment by Western in any
capacity, to have been a customer of or serviced by Western before or during
the Period of Employment; or (ii) recruit or solicit for employment, whether
as regular staff or as a temporary employee, any person employed by Western
(or any Affiliate).
6. Arbitration.
(a) Arbitrable Claims. All disputes between Xxxxxxx (and his attorneys,
successors, and assigns) and Western (and its Affiliates, shareholders,
directors, officers, employees, agents, successors, attorneys, and assigns)
relating in any manner whatsoever to the employment or termination of Xxxxxxx,
including, without limitation, all disputes arising under this Agreement,
("Arbitrable Claims") shall be resolved by arbitration. All persons and
entities specified in the preceding sentence (other than Western and Xxxxxxx)
shall be considered third-party beneficiaries of the rights and obligations
created by this Section on Arbitration. Arbitrable Claims shall include, but
are not limited to, contract (express or implied) and tort claims of all kinds,
as well as all claims based on any federal, state, or local law, statute, or
regulation, excepting only claims under applicable workers' compensation law and
unemployment insurance claims. By way of example and not in limitation of the
foregoing, Arbitrable Claims shall include any claims
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arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and
the California Fair Employment and Housing Act, as well as any claims
asserting wrongful termination, harassment, breach of contract, breach of the
covenant of good faith and fair dealing, negligent or intentional infliction
of emotional distress, negligent or intentional misrepresentation, negligent
or intentional interference with contract or prospective economic advantage,
defamation, invasion of privacy, and claims related to disability.
(b) Procedure. Arbitration of Arbitrable Claims shall be in accordance with
the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association, as amended ("AAA Employment Rules"), as augmented in
this Agreement. Arbitration shall be initiated as provided by the AAA
Employment Rules, although the written notice to the other party initiating
arbitration shall also include a statement of the claim(s) asserted and the
facts upon which the claim(s) are based. Arbitration shall be final and binding
upon the parties and shall be the exclusive remedy for all Arbitrable Claims.
Either party may bring an action in court to compel arbitration under this
Agreement and to enforce an arbitration award. Otherwise, neither party shall
initiate or prosecute any lawsuit or administrative action in any way related to
any Arbitrable Claim. Notwithstanding the foregoing, either party may, at its
option, seek injunctive relief pursuant to section 1281.8 of the California Code
of Civil Procedure. All arbitration hearings under this Agreement shall be
conducted in San Francisco, California. The Federal Arbitration Act shall
govern the interpretation and enforcement of this Section 6. THE PARTIES HEREBY
WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS,
INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING,
EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.
(c) Arbitrator Selection and Authority. All disputes involving Arbitrable
Claims shall be decided by a single arbitrator. The arbitrator shall be
selected by mutual agreement of the parties within thirty (30) days of the
effective date of the notice initiating the arbitration. If the parties cannot
agree on an arbitrator, then the complaining party shall notify the AAA and
request selection of an arbitrator in accordance with the AAA Employment Rules.
The arbitrator shall have only such authority to award equitable relief,
damages, costs, and fees as a court would have for the particular claim(s)
asserted. The fees of the arbitrator shall be split between both parties
equally. The arbitrator shall have exclusive authority to resolve all
Arbitrable Claims, including, but not limited to, whether any particular claim
is arbitrable and whether all or any part of this Agreement is void or
unenforceable.
(d) Confidentiality. All proceedings and all documents prepared in connection
with any Arbitrable Claim shall be confidential and, unless otherwise required
by law, the subject matter thereof shall not be disclosed to any person other
than the parties to the proceedings, their counsel, witnesses and experts, the
arbitrator, and, if involved, the court and court staff. All documents filed
with the arbitrator or with a court shall be filed under seal. The parties
shall stipulate to all arbitration and court orders necessary to effectuate
fully the provisions of this subsection concerning confidentiality.
(e) Continuing Obligations. The rights and obligations of Xxxxxxx and Western
set forth in this Section on Arbitration shall survive the termination of
Xxxxxxx'x employment and the expiration of this Agreement.
7. Integration. This Agreement is intended to be the final, complete, and
exclusive statement of the terms of Xxxxxxx'x employment by Western. This
Agreement supersedes all other prior and contemporaneous agreements and
statements, whether written or oral, express or implied, pertaining in
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any manner to the employment of Xxxxxxx, except insofar as the Stock Option
Agreement between the parties provides for certain stock option benefits. This
Agreement may not be contradicted by evidence of any prior or contemporaneous
statements or agreements. To the extent that the practices, policies, or
procedures of Western, now or in the future, apply to Xxxxxxx and are
inconsistent with the terms of this Agreement, the provisions of this Agreement
shall control.
8. Amendments; Waivers. This Agreement may not be amended except by an
instrument in writing, signed by each of the parties. No failure to exercise
and no delay in exercising any right, remedy, or power under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, or power under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
9. Assignment; Successors and Assigns. Xxxxxxx agrees that he will not assign,
sell, transfer, delegate, or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Agreement. Any such purported assignment, transfer, or delegation shall be null
and void. Nothing in this Agreement shall prevent the consolidation of Western
with, or its merger into, any other entity, or the sale by Western of all or
substantially all of its assets, or the otherwise lawful assignment by Western
of any rights or obligations under this Agreement. Subject to the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, legal representatives, successors, and
permitted assigns, and shall not benefit any person or entity other than those
specifically enumerated in this Agreement.
10. Severability. If any provision of this Agreement, or its application to
any person, place, or circumstance, is held by an arbitrator or a court of
competent jurisdiction to be invalid, unenforceable, or void, such provision
shall be enforced to the greatest extent permitted by law, and the remainder of
this Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect.
11. Attorneys' Fees. In any legal action, arbitration, or other proceeding
brought to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs.
12. Injunctive Relief. If Xxxxxxx breaches or threatens to breach any of the
covenants in Section 5 on Proprietary Information, the parties acknowledge and
agree that the damage or imminent damage to Western's business or its goodwill
would be irreparable and extremely difficult to estimate, making any remedy at
law or in damages inadequate. Accordingly, Western shall be entitled to
injunctive relief against Xxxxxxx in the event of any breach or threatened
breach of the above provisions by Xxxxxxx, in addition to any other relief
(including damages) available to Western under this Agreement or under law.
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13. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of California.
14. Interpretation. This Agreement shall be construed as a whole, according to
its fair meaning, and not in favor of or against any party. By way of example
and not in limitation, this Agreement shall not be construed in favor of the
party receiving a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.
15. Employee Acknowledgment. Xxxxxxx acknowledges that he has had the
opportunity to consult legal counsel in regard to this Agreement, that he has
read and understands this Agreement, that he is fully aware of its legal effect,
and that he has entered into it freely and voluntarily and based on his own
judgment and not on any representations or promises other than those contained
in this Agreement.
The parties have duly executed this Agreement as of the date first written
above.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
Western Staff Services (USA), Inc.
/s/ W. Xxxxxx Xxxxxx
-----------------------------------
By: W. Xxxxxx Xxxxxx
Its: Chairman of the Board
and Chief Executive Officer
Western Staff Services, Inc.
/s/ W. Xxxxxx Xxxxxx
-----------------------------------
By: W. Xxxxxx Xxxxxx
Its: Chairman of the Board
and Chief Executive Officer
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