Exhibit 10.3.9
EXECUTION COPY
TRANSITION AND RELEASE
AGREEMENT
This Transition and Release Agreement (the
“Agreement”) is entered into as of April 30, 2007, by
and among Westaff Support, Inc., (the “Company”),
Westaff, Inc. (“Parent”) and Patricia M. Newman
(“Executive”) (collectively, the
“Parties”).
1
Resignation as Chief Executive Officer and Board Member.
Executive shall resign from her positions as the Company’s
President and Chief Executive Officer, and from her position on
Parent’s Board of Directors (the “Board”),
effective on May 1, 2007 (the “Effective Date”). Within
ten (10) business days following the later of (a) the Effective
Date and (b) the date upon which Executive signs this Agreement,
Executive shall receive a lump-sum severance payment equal to one
(1) year of her current base salary, in accordance with Section
7(b) of her Employment Agreement dated March 16, 2005 (the
“Employment Agreement”). For avoidance of doubt, the
Parties acknowledge that this lump-sum severance payment will equal
Four Hundred Fifty Thousand Dollars ($450,000), less applicable tax
withholdings.
2.
Equity. On the Effective Date, (a) all of Executive’s
outstanding options to purchase common stock of the Company dated
April 7, 2005, August 15, 2000 and August 14, 2002 shall become
fully vested and exercisable, and (b) all shares of Company
restricted stock held by Executive shall become fully vested. The
exercise period for Executive’s vested options shall expire
ninety (90) days following the Service Termination Date (as defined
below). As provided in Section 12 (“Net Exercise”) of
this Agreement, Executive may exercise those options by paying the
net exercise price in stock that is the subject of the options, and
that net exercise of the options may be accomplished on any day,
notwithstanding otherwise applicable restrictions on trading of
shares by an executive, director, or former executive or director
of Company..
3.
Transitional Assistance. The Parties have agreed that after
the Effective Date, Executive shall serve the Company as a
consultant through September 1, 2007 (the “Service
Termination Date”) at which time her further consulting
services to the Company will terminate. Executive will serve as a
consultant to the Company from the Effective Date through the
Service Termination Date (the “Transition Period”), to
provide transitional support to members of management, and will
serve as an advisor to the Board and attend meetings of the Board
as requested by Parent. During the Transition Period, Executive
will continue to receive her current base salary and Allowance and
maintain her current employee benefits coverage in the form of
COBRA continuation coverage paid for by the Company. On the
Effective Date, Executive shall receive payment of her accrued but
unused vacation time and any accrued but unpaid Allowance and base
pay for the period through the Effective Date. On the Service
Termination Date, Executive shall receive payment of any accrued
but unpaid Allowance and base pay through the Service Termination
Date. Except as specifically provided herein, all benefits and
perquisites of employment will cease as of the Service Termination
Date or earlier termination by Executive of her consulting
services.
4.
Completion Payment. Executive shall be eligible for an
additional lump sum payment of Two Hundred Thousand Dollars
($200,000), less applicable tax withholdings,
1
following
completion of the Transition Period (the “Completion
Payment”). Executive shall receive this payment within ten
(10) business days following the earlier of (a) the Effective Date
and (b) the date upon which Executive signs the General Release of
Claims attached hereto as Exhibit A. Executive shall be eligible to
receive the Completion Payment if she is terminated by the Company
without “Cause”. Executive shall not, however, be
eligible for any portion of the Completion Payment if she resigns
from her engagement as a consultant with the Company prior to the
Service Termination Date, or if her engagement as a consultant is
terminated by the Company for Cause. For purposes of this
Agreement, “Cause” shall be defined in accordance with
Section 7(a) of the Employment Agreement.
5.
Release of Claims. In exchange for the benefits provided
herein, Executive completely releases the Company, Parent, its and
their affiliated, related, parent or subsidiary corporations, and
its and their present and former directors, officers, and employees
from, and agrees not to file, cause to be filed, or otherwise
pursue, any and all claims Executive may now have or has ever had
against any of them, including but not limited to claims for
compensation, bonuses, severance pay, stock options, and all claims
arising from Executive’s employment or the termination of
that employment (including, without limitation, any claims arising
under the Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the WARN Act or any state
counterpart, the California Fair Employment and Housing Act, or any
other claims for violation of any federal, state, or municipal
statutes), and any and all claims for attorneys’ fees and
costs.
Notwithstanding the foregoing, the Company and
Parent are not released from any obligations (whether under their
Certificate of Incorporation, Bylaws, applicable state law, any
indemnification agreement or otherwise) to indemnify and defend
Executive from and against all claims brought against Executive by
shareholders or third parties, including without limitation any
shareholder derivative suit, by reason of her status as an officer
or director of the Company or Parent or the actions of the Company
or Parent or the Board of Directors of the Company or Parent while
she was an officer or director (collectively “Indemnification
Claims”.) As such, any obligations of Parent under any
Indemnification Agreement between Parent and Executive shall
continue to be in effect with respect to such Indemnification
Claims.
Executive acknowledges that she has 21 days to
consider this Agreement (but may elect to sign it at any time
beforehand), and may consult an attorney in doing so. Executive
also acknowledges that she may revoke this Agreement within 7 days
of signing it by sending a certified letter to that effect to
Westaff, Inc., 298 North Wiget Lane, Walnut Creek, California 94598
Attention: Chief Financial Officer. Executive understands and
agrees that this Agreement shall not become effective or
enforceable and no payments or benefits will be provided hereunder
until the 7-day revocation period has expired.
Effective upon Executive’s release of
claims if she does not revoke this Agreement during the 7-day
period, Company and Parent release Executive from all claims, known
or unknown, and waive any rights under Section 1542 of the
California Civil Code set out in Section 6 below.
6.
Waiver of Unknown Claims. Executive agrees that because the
foregoing release specifically covers known and unknown
cl
