EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement supersedes that Executive Employment
Agreement entered into on July 12, 1997, by and between Labor Ready, Inc. and
Xxxxxx X. Xxxxxxxxx, Xx.
This Executive Employment Agreement is made and entered into by and
between Labor Ready, Inc., a Washington corporation, including its
subsidiaries ("Company") and Xxxxxx X. Xxxxxxxxx, Xx. ("Executive").
RECITALS
WHEREAS, Company believes that Executive's experience, knowledge of
corporate affairs, reputation and industry contacts are of great potential
value to Company's future growth and profits; and
WHEREAS, Company wishes to employ Executive and Executive is willing to
be employed by Company; and
WHEREAS, the parties anticipate that Company's Board of Directors will
elect Executive to the office of Executive Vice President and Chief Financial
Officer of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company and Executive agree as follows:
1. Employment. The Company agrees to and hereby does employ Executive,
and Executive agrees to and hereby does become employed by the Company,
subject to the supervision and direction of the Chairman, President and Chief
Executive Officer and of the Board of Directors. Executive's employment shall
be for a period commencing on August 1, 1997 and ending on July 31, 2001,
unless such period is extended by written agreement of the parties or is
sooner terminated pursuant to the provisions of Paragraphs 4, 11 or 12.
2. Duties of Executive. Executive agrees to devote the necessary time,
attention, skill, and efforts to the performance of his duties as Executive
Vice President and Chief Financial Officer of the Company or such other
duties as may be assigned by the Chairman, President and Chief Executive
Officer or the Board of Directors in their discretion.
3. Compensation.
(a) Executive's initial salary shall be at the rate of Thirteen
Thousand Five Hundred and No/100 Dollars ($13,500.00) per month, payable
semimonthly, from August 1, 1997 until changed by the Board of Directors as
provided herein.
(b) Company, acting through its Board of Directors, may (but shall
not be required to) increase, but may not decrease, Executive's compensation
and award to Executive such bonuses as the board may see fit, in its sole and
unrestricted discretion, commensurate with Executive's performance and the
overall performance of the Company.
4. Failure to Pay Executive. The failure of Company to pay Executive his
salary as provided in Paragraph 3 may, in Executive's sole discretion, be
deemed a breach of this Agreement and, unless such breach is cured within
fifteen days after written notice to Company, this Agreement shall terminate.
Executive's claims against Company arising out of the nonpayment shall
survive termination of this Agreement.
5. Options to Purchase Common Stock. Executive is granted an option to
purchase 120,000 shares of the Company's common stock. The terms and
conditions of the option are set forth in Exhibit A.
6. Reimbursement for Expenses. Company shall reimburse Executive for
reasonable out-of-pocket expenses that Executive shall incur in connection
with his services for Company contemplated by this Agreement, on presentation
by Executive of appropriate vouchers and receipts for such expenses to
Company. At times it may be in the best interests of the Company for
Executive's spouse to accompany him on such business travel. On such
occasions Company shall reimburse Executive for reasonable out-of-pocket
expenses incurred for his spouse. Such occasions shall be determined by
guidelines established by the Chairman, President and Chief Executive
Officer, or in the absence of such guidelines, by Executive's sound
discretion.
7. Vacation. Executive shall be entitled each year during the term of
this Agreement to a vacation of fifteen (15) business days, no two of which
need be consecutive, during which time his compensation shall be paid in
full. The length of annual vacation time shall increase by one day for every
year of service to the Company after 1997 to a maximum of 25 business days
per year.
8. Change in Ownership or Control. In the event of a change in the
ownership of Company, effective control of Company, or the ownership of a
substantial portion of Company's assets, all unvested stock options shall
immediately vest.
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9. Liabilitv Insurance and Indemnification. The Company shall procure
and maintain throughout the term of this Agreement a policy or policies of
liability insurance for the protection and benefit of directors and officers
of the Company. Such insurance shall have a combined limit of not less than
$2,000,000.00 and may have a deductible of not more than $100,000.00. To the
fullest extent permitted by law, Company shall indemnify and hold harmless
Executive for any and all lost, cost, damage and expense including attorneys'
fees and court costs incurred or sustained by Executive, arising out of the
proper discharge by Executive of his duties hereunder in good faith.
10. Other Benefits. Executive shall be entitled to all benefits offered
generally to employees of Company. Nothing in this Agreement shall be
construed as limiting or restricting any benefit to Executive under any
pension, profit-sharing or similar retirement plan, or under any group life
or group health or accident or other plan of the Company, for the benefit of
its employees generally or a group of them, now or hereafter in existence.
11. Termination by Company. Company may terminate this Agreement under
either of the following circumstances:
(a) This Agreement may be terminated for cause at any time upon
thirty (30) days written notice to Executive. Cause shall exist if Executive
is guilty of dishonesty, gross neglect of duty hereunder, or other act or
omission which impairs Company's ability to conduct its ordinary business in
its usual manner. The notice of termination shall specify with particularity
the actions or inactions constituting such cause. In the event of termination
under this section, Company shall pay Executive all amounts due hereunder
which are then accrued but unpaid within thirty (30) days after Executive's
last day of employment.
(b) In the event that Executive shall, during the term of his
employment hereunder, fail to perform his duties as the result of illness or
other incapacity and such illness or other incapacity shall continue for a
period of more than six months, the Company shall have the right, by written
notice either personally delivered or sent by certified mail, to terminate
Executive's employment hereunder as of a date (not less than 30 days after
the date of the sending of such notice) to be specified in such notice.
12. Termination by Executive. If Company shall cease conducting its
business, take any action looking toward its dissolution or liquidation, make
an assignment for the benefit of its creditors, admit in writing its
inability to pay its debts as they become due, file a voluntary petition or
be the subject of an involuntary petition in bankruptcy, or be the subject of
any state or federal insolvency proceeding of any kind, then Executive may,
in his sole discretion, by written notice to Company, terminate his
employment and Company hereby consents to the release of Executive under such
circumstances and agrees that if Company ceases to operate or to exist as a
result of such event, the non-
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competition and other provisions of Paragraph 16 of this Agreement shall
terminate. In addition, Executive shall have the right to terminate this
Agreement upon giving three (3) months written notice to Company.
13. Communications to Company. Executive shall communicate and channel
to Company all knowledge, business, and customer contacts and any other
matters of information that could concern or be in any way beneficial to the
business of Company, whether acquired by Executive before or during the term
of this Agreement; provided, however, that nothing under this Agreement shall
be construed as requiring such communications where the information is
lawfully protected from disclosure as a trade secret of a third party.
14. Binding Effect. This Agreement shall be binding on and shall inure
to the benefit of any successor or successors of employer and the personal
representatives of Executive.
15. Confidential Information.
(a) As the result of his duties, Executive will necessarily have
access to some or all of the confidential information pertaining to Company's
business. It is agreed that "Confidential Information" of Company includes:
(1) The ideas, methods, techniques, formats, specifications,
procedures, designs, systems, processes, data and software products
which are unique to Company;
(2) All customer, marketing, pricing and financial information
pertaining to the business of Company;
(3) All operations, sales and training manuals;
(4) All other information now in existence or later developed
which is similar to the foregoing; and
(5) All information which is marked as confidential or
explained to be confidential or which, by its nature, is confidential.
(b) Executive understands that he will necessarily have access to
some or all of the Confidential Information. Executive recognizes the
importance of protecting the confidentiality and secrecy of the Confidential
Information and, therefore, agrees to use his best efforts to protect the
Confidential Information from unauthorized disclosure to other persons.
Executive understands that protecting the Confidential Information from
unauthorized disclosure is critically important to the success and
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competitive advantage of Company and that the unauthorized disclosure of the
Confidential Information would greatly damage Company.
(c) Executive agrees not to disclose any Confidential Information to
others or use any Confidential Information for his own benefit. Executive
further agrees that upon request of the Chairman, President and Chief
Executive Officer of Company, he shall immediately return all Confidential
Information, including any copies of Confidential Information in his
possession.
16. Covenants Against Competition. It is understood and agreed that the
nature of the methods employed in Company's business is such that Executive
will be placed in a close business and personal relationship with the
customers of Company. Thus, during the term of this Executive Employment
Agreement and for a period of two (2) years immediately following the
termination of Executive's employment, for any reason whatsoever, so long as
Company continues to carry on the same business, said Executive shall not,
for any reason whatsoever, directly or indirectly, for him or on behalf of,
or in conjunction with, any other person, persons, company, partnership,
corporation or business entity:
(a) Call upon, divert, influence or solicit or attempt to call,
divert, influence or solicit any customer or customers of Company;
(b) Divulge the names and addresses or any information concerning any
customer of Company;
(c) Own, manage, operate, control, be employed by, participate in or
be connected in any manner with the ownership, management, operation or
control of the same, similar, or related line of business as that carried on
by Company within a radius of twenty-five (25) miles from any then existing
or proposed office of Company; and
(d) Make any public statement or announcement, or permit anyone else
to make any public statement or announcement that Executive was formerly
employed by or connected with Company.
The time period covered by the covenants contained herein shall not
include any period(s) of violation of any covenant or any period(s) of time
required for litigation to enforce any covenant. If the provisions set forth
are determined to be too broad to be enforceable at law, then the area and/or
length of time shall be reduced to such area and time and that shall be
enforceable.
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17. Enforcement of Covenants.
(a) The covenants set forth herein on the part of Executive shall
be construed as an agreement independent of any other provision in this
Executive Employment Agreement and the existence of any claim or cause of
action of Executive against Company, whether predicated on this Executive
Employment Agreement or otherwise, shall not constitute a defense to the
enforcement by Company of the covenants contained herein.
(b) Executive acknowledges that irreparable damage will result to
Company in the event of the breach of any covenant contained herein and
Executive agrees that in the event of any such breach, Company shall be
entitled, in addition to any and all other legal or equitable remedies and
damages, to a temporary and/or permanent injunction to restrain the violation
thereof by Executive and all of the persons acting for or with Executive.
18. Law to Govern Contract. It is agreed that this Agreement shall be
governed by, construed, and enforced in accordance with the laws of the State
of Washington.
19. Arbitration. Company and Executive agree with each other that any
claim of Executive arising out of or relating to this Agreement or the breach
of this Agreement or Executive's employment by Company, including, without
limitation, any claim for compensation due, wrongful termination and any
claim alleging discrimination or harassment in any form shall be resolved by
binding arbitration, except for claims in which injunctive relief is sought
and obtained. The arbitration shall be administered by the American
Arbitration Association under its Commercial Arbitration Rules at the
American Arbitration Association Office nearest the place of employment. The
award entered by the arbitrator shall be final and binding in all respects
and judgment thereon may be entered in any Court having jurisdiction.
20. Entire Agreement. This Agreement shall constitute the entire
agreement between the parties and any prior understanding or representation
of any kind preceding the date of this Agreement shall not be binding upon
either party except to the extent incorporated in this Agreement.
21. Modification of Agreement. Any modification of this Agreement or
additional obligation assumed by either party in connection with this
Agreement shall be binding only if evidenced in writing signed by each party
or an authorized representative of each party.
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22. No Waiver. The failure of either party to this Agreement to insist
upon the performance of any of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this
Agreement, shall not be construed as thereafter waiving any such terms and
conditions, but the same shall continue and remain in full force and effect
as if no such forbearance or waiver had occurred.
23. Attoneys' Fees. In the event that any action is filed in relation to
this Agreement, the unsuccessful party in the action shall pay to the
successful party, in addition to all other required sums, a reasonable sum
for the successful party's attorneys' fees.
24. Notices. Any notice provided for or concerning this Agreement shall
be in writing and shall be deemed sufficiently given when personally
delivered or when sent by certified or registered, return receipt requested
mail if sent to the respective address of each party as set forth below, or
such other address as each party shall designate by notice.
25. Survival of Certain Terms. The terms and conditions set forth in
Paragraphs 16, 17 and 18 of this Agreement shall survive termination of the
remainder of this Agreement.
26. Approval of Board of Directors. This Agreement is subject in its
entirety to and contingent upon approval by the Company's Board of Directors.
If this Agreement is not approved by the Board of Directors, this Agreement
and all of the rights, duties and obligations set forth herein shall
terminate.
IN WITNESS WHEREOF, each party to this Agreement has caused it to be
executed on the date indicated below.
EXECUTIVE: COMPANY:
Xxxxxx X. Xxxxxxxxx, Xx. Labor Ready, Inc., a Washington
corporation
By: Xxxxxx X. Xxxxxxxxx, Xx. By: /s/ Xxxxx X. Xxxxxxx
------------------------- ------------------------------
Xxxxx Xxxxxxx, Chairman, President
and Chief Executive Officer
Date: August 12, 1997 Date: August 12, 1997
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EXHIBIT A
Stock Option Grant
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GRANT DATE: August 1, 1997
XXXXX XXXXX: $12.50 (Closing price on the Grant Date)
TOTAL NUMBER OF SHARES: 120,000
VESTING SCHEDULE: Options for the specified number of shares shall
vest on the following dates:
DATE NUMBER OF SHARES
------ ----------------
8/1/97 30,000
2/1/98 15,000
8/1/98 15,000
2/1/99 15,000
8/1/99 15,000
2/1/00 15,000
8/1/00 15,000
TERMS AND CONDITIONS OF THE STOCK OPTION GRANT:
1. Except as otherwise provided herein, all unexercised options shall
expire five (5) years from the Grant Date or upon the termination date,
whichever is earlier, if the Executive Employment Agreement is terminated for
cause or terminated by Executive as provided in the last sentence of
Paragraph 12 of the Agreement. If the Executive Employment Agreement is
terminated for reasons other than specified in the preceding sentence, then
all options shall immediately vest and the exercise date shall be extended to
a date which is five years after the date of termination.
2. Company shall register all shares acquired through the exercise of
Executive's options.
3. Executive shall be responsible for any income tax consequences and
expense associated with the grant or exercise of the options, and is
responsible for consulting his individual tax advisor.
4. As provided in the Employee Stock Option and Incentive Plan, payment
for shares purchased through the exercise of options may be made either in
cash or its equivalent or by tendering previously acquired shares at market
value, or both.
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