Exhibit 10.2


 


 




	
   

  	
   

  	
   

  	
   

  	
  HUMAN
  RESOURCES

  RECEIVED

   

  OCT 04
  2004

  






 





 


KEY
EMPLOYEE


TRANSITION
COMPENSATION PLAN 

AND SUMMARY PLAN DESCRIPTION


Effective
June 2, 2003 

(Amended September 20, 2004)


 

















 





KEY
EMPLOYEE


TRANSITION
COMPENSATION PLAN 

AND SUMMARY PLAN DESCRIPTION


 


Introduction


 


Westaff
(USA), Inc. and its wholly-owned subsidiary, Westaff Support, Inc.
(the “Company”), have established the Westaff® Key Employee Transition
Compensation Plan (the “KETC Plan”) to provide transition compensation to
select regular employees whose positions have been eliminated. This document
constitutes both the formal plan document and the summary plan description of
the KETC Plan.


 


Eligible Employees


 


“Eligible
Employees” are active regular employees (or regular employees on an approved
leave of absence of no more than six (6) months in the twelve (12) month
period prior to the time of position elimination) who:


 


(a)          have been designated as a “key employee”  by senior management of the Company;


 


(b)         are participants in the Salary
Reduction Initiative of June 2003 effective the pay period
beginning June 30, 2003;


 


(c)          are not dismissed for “Cause” or “Performance-related Issues” as
further explained below; and


 


(d)         have not voluntarily terminated employment (quit) prior to the elimination
of their position.


 


Such
employees become eligible for transition compensation under the KETC Plan for (a) up
to one year following a “Change in Control” as defined below, or (b) in
the event of job elimination when they have not been offered a “Comparable
Position.” A Comparable Position is defined as follows:


 


•                  A
position similar in responsibility, skill requirements and work schedule as
the employee’s current position; and


 


•                  A
position for which the salary offered would require no more than a 10%
reduction in the employee’s then current pay; and


 


•                  A
position that does not require the employee to travel more than 30 miles from
his or her current primary place of work.


 


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Change in Control


 


A
“Change in Control” means:


 


•                  The
sale, lease or disposition of substantially all of the assets of the Company
(directly or indirectly) and its parent, Westaff, Inc. (“the Parent”);


 


•                  Any
consolidation or merger of the Company and the Parent with or into any other
corporation or other entity or person, or any other corporate reorganization,
in which the stockholders of the Company and the Parent immediately prior to
such consolidation, merger or reorganization, own less than 50% of the Company’s
and the Parent’s voting power immediately after such consolidation, merger or reorganization;
or


 


•                  A
change in ownership or control of the Company or the Parent effected through
any of the following transactions:


 


(i)                                     any transaction or series of related
transactions as a result of which
any person or related group of persons initially becomes the beneficial owner
(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934),
directly or indirectly, of securities possessing more than fifty percent (50%)
of the total combined voting power of the Company’s or the Parent’s then
outstanding voting securities. For purposes of this sub-paragraph, the term “person”
shall exclude (i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Parent or of a subsidiary and (ii) a
corporation owned directly or indirectly by the stockholders of the Parent in
substantially the same proportions as their ownership of the common stock of
the Parent;


 


(ii)                                  or a change in the composition of the Board of
the Parent over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more elections for Board membership, to be
comprised of individuals who either (A) have been Board members continuously
since the beginning of such period or (B) have been elected or nominated
for election as Board members during such period by at least a majority of the
Board members described in clause (A) who were still in office at the time
such election or nomination was approved by the Board.


 


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A transaction shall not constitute a Change in
Control if its sole purpose is to create a holding company that will be owned,
directly or indirectly, in substantially the same proportions by the persons
who held the Parent’s securities immediately before such transaction.


 


Termination for Cause or for Performance-related
Issues


 


A
Termination for “Cause” or for “Performance-related Issues” means the employee:


 


•                  acts in bad faith, or in breach of trust, to
the detriment of the Company;


 


•                  intentionally refuses or fails to act in a
way that constitutes a material violation of Company policy;


 


•                  exhibits, in regard to his/her employment,
unfitness or unavailability for service, unsatisfactory performance of the duties
required of their employment, provided that the Company has given him/her
written notice of the unsatisfactory performance and the action required by the
employee to make such performance satisfactory, and the employee has not
improved his/her performance to a satisfactory level;


 


•                  exhibits habitual or willful misconduct in
the performance of his/her duties;


 


•                  is convicted of a crime involving dishonesty;
or


 


•                  materially breaches his/her Employment
Contract


 


Benefits


 


Each
Eligible Employee who is entitled to benefits under the KETC Plan shall receive
transition compensation in the form of a single lump sum cash payment
equivalent to 26 weeks of his or her then current pay less appropriate
withholdings. “Current pay” means the employee’s base salary rate in effect on
the date the employee’s position is eliminated. This payment is in addition to
other compensation which may be provided by the Company’s current
Transition Compensation Plan (TCP) in effect at that time, or specific
provisions of the employee’s Employment Contract related to severance pay.


 


Entitlement to Benefits


 


The
KETC Plan’s benefits will be provided only to an Eligible Employee who signs
and returns a Release as described below. Benefits are paid when


 


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employment
is terminated and the Release is irrevocable, except as otherwise provided by
Older Worker Protection Act’s revocation clause.


 


Release


 


To
receive transition compensation under the KETC Plan, an Eligible Employee must
sign a Release in the form and within the time established by the Company.


 


Withholding for Taxes


 


Notwithstanding
any other provision of the KETC Plan, all transition compensation shall be
reduced by applicable federal, state, or local tax withholding.


 


No Other Similar Compensation and Right of Setoff


 


Other
than pursuant to the terms of the KETC Plan, the Company’s separation pay in
lieu of notice policy, and any specific provisions of the employee’s Employment
Contract, the Company has no prior or other obligation, whether by express or
implied contract or otherwise, to provide any transition or other severance
benefit to employees who are discharged by the Company other than in
accordance with the Transition Compensation Plan (TCP.)


 


Any
payment made under the KETC Plan is a voluntary payment made by the Company,
which payment employees are not entitled to receive except according to the
terms of the KETC Plan. In the event that the Company is or becomes obligated
to provide payment under any other plan or by reason of any applicable law,
settlement or decision, the amount of any payment made to an employee under the
KETC Plan shall be set off against the amount that the Company is liable to pay
that employee, if any, under such other plan, law, settlement or decision.


 


Source of Benefits


 


The
benefits provided under the KETC Plan shall be unfunded and payable solely from
the general assets of the Company.


 


Expenses


 


The
expenses of operating and administering the KETC Plan shall be borne entirely
by the Company.


 


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KETC Plan Sponsor and Administrator


 


The
Company shall be the “KETC Plan Sponsor” and the “Administrator” of the KETC
Plan, as such terms are defined in the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”). The Administrator shall make any and all
determinations required to be made in connection with the operations and
administration of the KETC Plan, including (without limitation) the determination
of whether an employee is an eligible employee and the amount of any benefit
payable hereunder. The Administrator shall have the discretionary power to
interpret the provisions of the KETC Plan as it may determine is necessary
or appropriate for the operations and administration of the KETC Plan.


 


Named Fiduciary


 


The
Company is the “named fiduciary” of the KETC Plan within the meaning of ERISA,
including the “named fiduciary” with the power to act with respect to the
review of claims for compensation under the KETC Plan that are denied.


 


Allocation and Delegation of Responsibilities


 


The
Company may allocate any of its responsibilities for the operation and
administration of the KETC Plan to any officer or employee of the Company. It may also
delegate any of its responsibilities under the KETC Plan by designating, in
writing, another person to carry out such responsibilities. Any person so
designated shall then be responsible for carrying out the responsibilities
described in such writing.


 


No Individual Liability


 


It
is the express purpose and intention of the Company that no individual
liability whatsoever shall attach to, or be incurred by, any director, officer,
employee, representative or agent of the Company under, or by reason of the
operation of, the KETC Plan.


 


No Amendment or Termination of the KETC Plan


 


The
Company affirms that this June 2, 2003 KETC Plan will remain in full force
and effect with regard to the Eligible Employees and will continue for up to
one year after a Change in Control during which time it will not be subject to
amendment or termination with regard to the Eligible Employees unless both the
Company and the Eligible Employee agree in writing.


 


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Claims and Review Procedures


 


Any
employee who believes that the employee has not received the proper
compensation under the KETC Plan must file a written claim with the
Administrator. The Administrator will review the claim and notify the employee
of its decision in writing within 60 days after the claim is received.


 


If
the Administrator denies a claim, in whole or in part, the Administrator’s
notice will set forth:


 


1.                    The specific reason(s) for denial;


 


2.                    The KETC Plan provision(s) on which the
denial is based;


 


3.                    A description of any material or information necessary
for the claimant to perfect the claim, 
and an explanation of any such material or information is necessary and;


 


4.                    Information concerning the steps to be taken
if the claimant wishes to submit the claim for further review.


 


If
the claimant feels the denial of the claim is improper, the claimant, or the
claimant’s duly authorized representative, must file a written request for a
full review of the claim. A request for review must be filed with the
Administrator within 90 days after the claimant receives the notice of denial
and should set forth all of the grounds upon which it is based, all facts in
support of the request and any other matters the claimant (or the claimant’s
representative) deems pertinent. The Administrator will furnish the claimant
with a final written decision within 60 days after receipt of the request for
review.


 


Questions Regarding the KETC Plan


 


An
employee having questions regarding the KETC Plan or its application should
direct them to the Company’s Human Resources Department.


 


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TO EVIDENCE THE ADOPTION OF THE WESTAFF® KEY EMPLOYEE TRANSITION COMPENSATION PLAN effective
as of June 2, 2003 and amended as of September 20, 2004 this document
has been executed by an authorized officer of the Company.


 


	
   

  	
  Westaff (USA), Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:
  September 20, 2004

  	
  By:

  	
  /s/
  Dwight S. Pedersen

  	
   

  
	
   

  	
   

  	
  Dwight
  S. Pedersen

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  



 


By signing below, the employee acknowledges receipt and
agreement to the terms of the June 2, 2003 Key Employee Transition
Compensation Plan and amended September 20, 2004:


 


 


	
  By:

  	
    /s/ John P.
  Sanders

  	
   

  	
  Date:

  	
    9/27/04

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    John
  Sanders

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    VP.
  INTERNAL AUDIT

  	
   

  	
   

  



 


 


Note: A copy of this signed document is to be maintained in
the employee’s personnel file.


 


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