EXHIBIT
10.3.13.5


 


SETTLEMENT
AGREEMENT AND RELEASE IN FULL


 


This Settlement Agreement and Release in Full (“Agreement”)
is entered into between Jeffrey A. Elias (“Elias”)  and Westaff, Inc. a Delaware corporation
and Westaff Support, Inc., a California corporation and subsidiary of
Westaff, Inc., (collectively, “Westaff”).


 


WHEREAS, Elias was employed by Westaff Support, Inc.
as Senior Vice President, Corporate Services pursuant to the November 28,
2006 Employment Agreement, and all amendments thereto  (as amended the “Employment Agreement”); and


 


WHEREAS, on May 22, 2008, Elias resigned from his
position as Senior Vice President, Corporate Services (“Resignation Date”), and
the parties hereto wish to specify and agree upon the terms and conditions of
Elias’s resignation from Westaff by entering into this Agreement.


 


Thus, in consideration of the mutual covenants and
promises contained in this Agreement, Elias and Westaff agree as follows:


 


1.                                       Elias, for and on behalf of himself and
his heirs, beneficiaries, executors, administrators, attorneys, successors, and
assigns shall forever waive, release, discharge, and covenant not to sue Westaff,
all related companies, partnerships, or joint ventures, and, with respect to
each of them, their predecessors and successors; and, with respect to each such
entity, all of its past and present employees, officers, directors,
stockholders, owners, representatives, assigns, attorneys, agents, insurers,
employee benefit programs (and the trustees, administrators, fiduciaries, and
insurers of such programs), and any other persons acting by, through, under or
in concert with any of the persons or entities listed in this section (hereinafter
also referred to as the “Released Parties”). 
Elias understands and agrees that he is releasing all known and unknown
claims, promises, causes of action, or similar rights of any type that he may
have (the “Claims”) against any Released Party, except that he is not releasing
any claims that relate to (i) his right to enforce this Agreement; or (ii) any
rights or claims which may arise or accrue after he signs this Agreement.  Elias further understands that the Claims he
is releasing may arise under many different laws (including statues,
regulations, other administrative guidance, and common law doctrines),
including, but not limited to:


 


a.               Anti-discrimination statutes, such as Title VII of the Civil Rights Act of 1964,  Section 1981 of the Civil Rights Act of 1866, Executive Order 11246, the California Fair Employment and Housing Act (Gov. Code 12900 et  seq.) and the California Family Rights Act, which prohibit discrimination based race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Age Discrimination in Employment Act of 1967, which prohibits age discrimination; the Americans With Disabilities Act and Section 503 and 504 of the Rehabilitation Act of 1973, which prohibit discrimination based on disability; and any other federal, state, or local law prohibiting employment or wage discrimination.
 
b.              Federal employment statutes, such as the WARN Act, which requires that advance notice be given of certain work force reductions; the Employee Retirement Income Security Act of 1974, which, among other things, protects employee benefits; the Fair Labor Standards 
 















 
Act of 1938 and the California Labor Code or Industrial Welfare Commission Wage Orders, which regulate wage and hour matters; the Family and Medical Leave Act of 1993, which requires employers to provide leaves of absence under certain circumstances; and any other federal laws relating to employment, such as veterans’ reemployment rights laws.
 
c.               Other laws, such as any federal, state, or local laws governing the payment of wages or benefits, including any law providing for penalties and interest, as well as laws governing working conditions, restricting an employer’s right to terminate employees, or otherwise regulating employment; any federal, state, or local law enforcing express or implied employment contracts or requiring an employer to deal with employees fairly or in good faith.
 
d.              Tort and Contract Claims, such as claims for wrongful discharge, physical or personal injury, emotional distress, fraud, fraud in the inducement, negligent misrepresentation, defamation, invasion of privacy, interference with contract or with prospective economic advantage, breach of express or implied contract, breach of covenants of good faith and fair dealing, and similar or related claims.
 
e.               Examples of released Claims include, but are not limited to:  (i) Claims for unpaid wages, penalties under federal or state wage laws, and interest thereon; (ii) Claims that in any way relate to employment with the Company or any other Released Party, or the termination of that employment, such as Claims for compensation, bonuses, commissions, lost wages, unused accrued vacation or sick pay; (iii) Claims that in any way relate to the design or administration of any employee benefit program; (iv) Claims of irrevocable or vested rights to severance or similar benefits or to post-employment health or group insurance benefits; or (v) any Claims to attorneys’ fees or other indemnities.
 


2.                                       Elias understands that this Agreement is
a full and final release covering all known and unknown claims, and he waives
all rights or benefits that he may have now or in the future, under the terms
of Section 1542 of the California Civil Code which provides as follows:


 


“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”


 


3.                                       Elias, for and on behalf of himself and
his heirs, beneficiaries, executors, administrators, attorneys, successors, and
assigns, also agrees and covenants not to file a lawsuit or administrative
complaint to assert any claim with respect to his employment with Westaff, or
the cessation of his employment with Westaff prior to the execution of this
Agreement.  Any lawsuit or administrative
complaint filed in violation of this Agreement by Elias, for and on behalf of
himself or his heirs, beneficiaries, executors, administrators, attorneys,
successors, or 


 


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assigns shall automatically constitute a breach of
this Agreement, and in addition to any other legal remedies available to Westaff
may immediately terminate this Agreement and Westaff shall have no further
obligation to pay any salary continuation compensation as set forth in section
4 of this Agreement.  Additionally, Elias
will no longer be entitled to any benefits as described in section 5 of this
Agreement.


 


4.                                       As consideration for Elias’s agreement to
the terms and conditions of this Agreement, Westaff will pay Elias a severance
pay of a sum equal to twenty-six (26) weeks salary.  Elias’s severance pay will be in the form of
salary continuation based on Elias’s current pay (“Salary Continuation Compensation”).  “Current pay” means Elias’s base salary rate
in effect as of May 22, 2008.   Elias’s salary continuation shall be paid on a
bi-weekly basis at the same time as Westaff’s regular payroll.  The bi-weekly amount is $9,615.39 (gross)
less appropriate federal and state tax withholding and statutory deductions and
shall begin on the first pay period following the eighth (8th) day after the date of execution by both parties to
this Agreement.  Elias acknowledges that
he has been paid all wages due, including any incentive compensation, as well
as his accrued, but unused vacation pay in a single lump sum payment less all
appropriate withholdings through May 26, 2008.  Elias understands that he shall not be
entitled to accrue vacation and sick time during the salary continuation
period.


 


5.                                       Elias will continue participation in
Westaff’s benefit plans while receiving salary continuation, namely, Westaff’s
medical, dental and vision plans, life insurance, supplemental life insurance,
long and short term disability, 401(k) savings plans, deferred
compensation plan and flexible spending accounts, if applicable.  Participation in these plans will terminate
upon the first to occur of 1) the expiration of the 26 week salary continuation
period, or 2) the date Elias becomes entitled to benefits under a comparable
plan of another employer.


 


6.                                       Elias’s unexercised options to purchase
Westaff stock shall terminate as of the Resignation Date, in accordance with
the terms and conditions of the Westaff, Inc. 2006 Stock Inventive Plan
(the “Plan”) and the Notices of Grant given to Elias under such Plan.


 


7.                                       Nothing contained in this Agreement, or
the fact of its submission to Elias, shall be admissible evidence in any
judicial, administrative, or other legal proceeding, or be construed as an
admission of any liability or wrongdoing on the part of Westaff or the other
Released Parties of any violation of federal or state statutory or common law
or regulation.


 


8.                                       Elias acknowledges that he has entered
into this Agreement freely, knowingly, and voluntarily; it is further
understood and agreed that this Agreement was reached and agreed to by the
parties in order to avoid the expense of litigation, as well as the
uncertainties of potential litigation.


 


9.                                       By signing this Agreement, Elias
understands and agrees that all post-termination obligations of Elias under his
Employment Agreement will remain in full force and effect including, but not
limited to, all provisions relating to Elias’s obligations to (a) protect
proprietary/confidential information, (b) abide by any Confidential
Information and Invention Agreement, and (c) refrain from soliciting
Westaff employees and clients as set forth in his Employment Agreement.  Elias further understands and agrees that
should Elias violate Elias’s post-termination obligations, Westaff may
immediately terminate this Agreement and Westaff 


 


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shall have no further obligation to pay any Salary Continuation
Compensation as set forth in section 4 of this Agreement.  Additionally, Elias will no longer be
entitled to any benefits as described in section 5 of this Agreement.


 


10.                                 The parties further agree that they will
not make any voluntary statements, written or oral, or cause or encourage others
to make any such statements that defame or disparage the person and/or business
reputations, practices, or conduct of the parties.


 


11.                                 Elias agrees and acknowledges that he has
read this Agreement carefully and fully understands all of its provisions.  Westaff advises Elias to consult with legal
counsel with respect to this Agreement before executing it, and Elias
acknowledges that he has had the opportunity to consult with legal counsel
regarding the terms and conditions of this Agreement, and that he has had ample
time to review this Agreement.  Elias
acknowledges that he has had the opportunity to have at least twenty-one (21)
days to consider the terms and conditions set forth in this Agreement.  By signing below, Elias acknowledges that he
has voluntarily accepted the terms and conditions of this Agreement.


 


12.                                 Elias represents that he has not assigned
or transferred any Claim that he is releasing, nor has he purported to do so.


 


13.                                 Elias acknowledges and agrees that Westaff
has not made any representations to him regarding the tax consequences of any
amounts received by or paid to Elias. 
Elias agrees to pay all federal, state, and local taxes, if any, that
are required by law to be paid by him with respect to the amounts paid under
this Agreement.  Elias agrees to
indemnify, defend, and hold harmless Westaff and the Released Parties from any
claims, demands, deficiencies, assessments, executions, judgments, or
recoveries by any governmental entity against Westaff or any of the Released
Parties for any amounts claimed due with respect to payments made pursuant to
this Agreement or pursuant to claims made under any federal or state tax laws,
and any costs, expenses or damages sustained by Westaff or the Released
Parties, including attorneys’ fees, in the event Westaff, the Released Parties,
or any of them individually, are required to file suit or take other legal
action to enforce this paragraph.


 


14.                                 Subject to paragraph 9 of this Agreement,
this Agreement constitutes the entire agreement among the parties hereto with
respect to all the matters discussed herein, and supersedes all prior or
contemporaneous discussions, communications or agreements, expressed or
implied, written or oral, including any written contract of employment, by or
between the parties including, but not limited to Elias’s Employment Agreement
dated November 28, 2006 and any amendments thereto.  The Agreement may not be modified or canceled
in any manner except by a writing signed by Elias and an authorized Westaff
official.  Elias acknowledges that the
Released Parties have made no representations or promises to him, other than
those in this Agreement.  If any
provision in this Agreement is found to be unenforceable, all other provisions
will remain fully enforceable.  The
covenants set forth in this Agreement shall be considered and construed as
separate and independent covenants. 
Should any part or provision of this Agreement be held invalid, void or
unenforceable in any court of competent jurisdiction, such invalidity, voidness
or unenforceability shall not render invalid, void or unenforceable any other
part or provision of this Agreement.


 


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15.                                 This Agreement binds Elias’s heirs,
administrators, representatives, executors, successors, and assigns, and will
inure to the benefit of all Released Parties and their respective heirs,
administrators, representatives, executors, successors, and assigns.  If at any time Westaff is a party to any
acquisition, merger, consolidation or reorganization, this Agreement shall
remain in full force and effect.


 


16.                                 This Agreement may be executed in
counterparts and shall be construed and enforced in accordance with the laws of
the State of California.


 


17.                                 This Agreement shall not become effective
or enforceable until seven (7) days after the date of execution by both
parties of this Agreement (the “Effective Date”).  Elias shall have the right to revoke this
Agreement at any time during the seven (7) day ratification period.  Revocation can be made by delivering a
written notice of revocation to Jamie Ryan, Vice President, Legal via hand
delivery, Federal Express, or certified mail return receipt requested.  Written notice must be received by Jamie Ryan
no later than 5:00 p.m. on the 7th calendar day after Elias signs this Agreement.


 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date specified below.


 


 


	
  Dated:  June 2nd, 2008

  	
   

  	
  By: 

  	
    /s/ Jeffrey
  A. Elias

  
	
   

  	
   

  	
   

  	
         (Jeffrey
  A. Elias)

  
	
   

  	
   

  	
   

  
	
  Dated:  June 2,
  2008

  	
   

  	
  By: 

  	
    /s/ Jamie
  M. Ryan

  
	
   

  	
   

  	
   

  	
         (Company
  Representative)

  



 


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