EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
This Employment
Agreement (“Agreement”) deemed effective as of
June 16, 2008 and is entered into by and among Westaff
Support, Inc., Westaff (USA), Inc. and Westaff, Inc.
(collectively, the “Company”) and Stephen J. Russo (the
“Executive”). The parties agree to the following terms
and conditions of the Executive’s employment.
1.
EMPLOYMENT. The Company hereby employs the
Executive, and the Executive hereby accepts such employment, upon
the terms and subject to the conditions hereinafter set forth.
2.
DUTIES.
(a)
Position and Responsibilities. The Executive shall be
employed as the Company’s Executive Vice President and Chief
Operating Officer. After six (6) months of employment,
the Executive shall assume the title of President in addition to
Chief Operating Officer, contingent upon achieving mutually agreed
upon targets which will be set in writing between the Company and
the Executive within the first two (2) weeks of employment.
Executive shall have such responsibilities and duties as are
consistent with his position, and any other duties that the Company
may assign to him. The Executive shall devote his full
working time, attention and energies to the performance of his
duties for the Company and the Executive shall at all times comply
with the Company’s Conflict of Interest Policy and Code of
Business Conduct and Ethics and abide by the rules, regulations,
and practices as adopted or modified from time to time by the
Company.
(b)
Term. The Executive’s employment shall commence on
Monday, June 16, 2008, and his employment shall be of
indefinite duration, subject to termination under Section 4 of
this Agreement. The Executive acknowledges that there is no express
or implied agreement between him and the Company or any of its
subsidiaries, whether domestic or foreign, for any specific period
of employment or for continuing or long-term employment.
(c)
Other Activities . Except upon the prior written consent
of the Company, the Executive will not, during the term of this
Agreement, (i) accept any other employment, or
(ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that
might interfere with Executive’s duties and responsibilities
hereunder or create a conflict of interest with the
Company.
(d)
No Conflict . Executive represents and warrants that
his execution of this Agreement, employment with the Company, and
the performance of his proposed duties under this Agreement shall
not violate any obligations he may have to any other employer,
person or entity, including any obligations with respect to
proprietary or confidential information of any other person or
entity.
3. COMPENSATION AND
BENEFITS. In consideration for the services of
the Executive, the Company shall compensate the Executive as
follows:
(a)
Base Salary. The Company shall pay the Executive an
initial annual base salary of $375,000 (“Base Salary”),
less required and authorized withholdings, which shall be paid to
the Executive in accordance with the Company’s normal payroll
practices and schedule.
(b)
Benefits. As the Executive becomes eligible, he
shall have the right to participate in and to receive benefits from
all present and future employee benefit plans specified in the
Company’s policies and generally made available to similarly
situated employees of the Company. The amount and
1
extent of benefits to
which the Executive is entitled shall be governed by the specific
benefit plan, as amended.
(c)
Expenses. The Company shall reimburse the Executive for
all reasonable travel and other business expenses incurred by the
Executive in the performance of his duties, in accordance with
Company policies, as they may be amended in the Company’s
sole discretion.
(d)
Incentive Compensation. The Executive shall be eligible
for an annual bonus of up to 50% of his Base Salary, prorated for
FY 2008. The bonus will be based on the Company’s
performance metrics and will be approved annually by the
Compensation Committee. The Executive will not be eligible
for any bonus or incentive compensation payment if his employment
with the Company terminates for cause before such bonus or
incentive compensation payment is earned or paid. If
the Executive’s employment with the Company terminates
without Cause prior to such bonus or incentive compensation payment
being earned or paid, Executive will be entitled to a prorated
portion of such bonus or incentive compensation.
(e)
Stock Options. Subject to approval from the
Company’s Board of Directors (or a duly authorized committee
of the Company’s Board of Directors) (the
“Board”), the Executive will be eligible to participate
in the Company’s 2006 Stock Incentive Plan (the “Stock
Option Plan”). If approved, Executive will be awarded
150,000 stock options pursuant to the terms stated in the
Company’s Stock Option Plan and the Notice of Stock Option
Award (including, but not limited to the vesting schedule for the
option shares).
(f)
Vacation. The Executive shall accrue four
(4) weeks of vacation per year, subject to the Company’s
policies with respect to maximum vacation accruals.
(g)
Indemnification. The Company and the Executive shall enter into
the Company’s customary form of indemnification agreement
applicable to directors and executive officers of the Company, in
the form attached as Exhibit A (the “Indemnification
Agreement”).
4. TERMINATION OF
EMPLOYMENT.
(a)
Termination of Employment For Cause. For purposes
of this Agreement, the Company may terminate the Executive’s
employment for “Cause” at any time, without any notice,
if the Executive does any one or more of the following:
(i)
acts in bad faith, or in breach of trust, to the detriment of the
Company;
(ii)
refuses or fails to act in accordance with any policy of the
Company or any specific direction or order of the
Company;
(iii)
exhibits, in regard to his employment and as determined by the
Company in its sole discretion, unfitness or unavailability for
service, unsatisfactory or inadequate performance (including but
not limited to the Executive’s failure or inability to meet
the Company’s expectations, goals, standards and/or deadlines
with respect to his duties), misconduct, dishonesty, habitual
neglect of duties or incompetence;
(iv)
commits, is convicted of, or pleads no contest to a crime involving
dishonesty, breach of trust, moral turpitude, or physical harm to
any person;
2
(v)
breaches any material term of this Agreement or any other agreement
that the Executive has entered into with the Company (including but
not limited to his Confidentiality, Invention, Design Agreement,
which is attached hereto and incorporate herein as
Exhibit B);
(vi)
dies; or
(vii)
becomes disabled and therefore unable to perform the essential
duties of his position for a period of more than 12 workweeks
within any twelve (12)-month period.
If the
Executive’s employment shall be terminated by the Company for
Cause as defined above, the Company shall pay the Executive his
earned but unpaid Base Salary and accrued but unused vacation pay,
and shall provide his benefits under the applicable benefit plans
through the date of termination and otherwise as required by
law. The Executive shall not be eligible or entitled to a
severance payment described in Section 4(b) below if his
employment is terminated for Cause and no other compensation or
benefits will accrue or be owed to the Executive for any period
after the effective date of termination in the event of a
termination for Cause.
(b)
Termination by Employer Not For Cause. The Company
may terminate the Executive’s employment at any time for any
reason. If the Executive’s employment is terminated
without Cause, the Company shall pay the Executive his earned but
unpaid Base Salary, his accrued but unused vacation pay and his
earned but unpaid bonus, if any, and shall provide his benefits
under the applicable benefit plans through the date of termination
and otherwise as required by law. In addition, the Executive
shall be entitled to a severance payment, as set forth below (the
“Severance Payment”), provided he signs a separation
ag
| 
