EXHIBIT 10.3


LIQUIDITY
SERVICES, INC.


EXECUTIVE EMPLOYMENT AGREEMENT


THIS EXECUTIVE EMPLOYMENT
AGREEMENT (“Agreement”) is entered into as of
November 11, 2005 with an effective date of November 11, 2005, as amended
January 9, 2007, (the “Effective Date”),
by and between Liquidity Services, Inc., a Delaware corporation (“LSI” or the “Company”), and
James E. Williams (the “Executive”).


1.             Employment
Agreement.  On the terms
and conditions set forth in this Agreement, the Company agrees to employ the
Executive and the Executive agrees to be employed by the Company for the
Employment Period set forth in Section 2 hereof and in the position
and with the duties set forth in Section 3 hereof.  Terms used herein with initial capitalization
are defined in Section 10.12 below.


2.             Term.  The term of employment under this Agreement
shall be the period set forth in Schedule 1 attached hereto commencing
on the Effective Date (the “Employment Period”).


3.             Position
and Duties.  The Executive
shall serve in the position and with the duties and title set forth in Schedule
1 attached hereto during the Employment Period.  In such capacity, the Executive shall have
the normal duties, responsibilities, and authority of such position, subject to
the power of the Executive’s “Reporting Officer”
as designated in Schedule 1, the Company’s Chairman of the Board of
Directors (the “Board”) or the Board to
reasonably expand or limit such duties, responsibilities and authority. The
Executive shall report to the Reporting Officer designated in Schedule 1.  The Executive shall devote the Executive’s
best efforts and full business time and attention to the business and affairs
of the Company; provided, however, that Executive
may, to the extent such participation or service does not materially interfere
with the performance of the obligations described in this Agreement, (i)
participate in charitable, civic, political, social, trade, or other non-profit
organizations and (ii) with the consent of the Board such consent not to be
unreasonably withheld, serve as a non-management director of business
corporations (or in a like capacity in other for-profit organizations).


4.             Place of
Performance.  In
connection with the Executive’s employment by the Company, the Executive shall
be based at the principal executive offices of the Company, except as otherwise
agreed by the Executive and the Company and except for reasonable travel on
Company business.


5.             Compensation.


5.1.          Base Salary.  During the Employment Period, the Company
shall pay to the Executive an annual base salary (the “Base Salary”),
which initially shall be at the rate per year as set forth in Schedule 1.  The Base Salary shall be payable semi-monthly
or in such other installments as shall be consistent with the Company’s payroll
procedures. The Base Salary may be increased at any time or from time to time,
but it may not be decreased without the consent of the Executive.


5.2           Bonus.  The Executive shall be eligible for a
performance bonus as set forth in Schedule 1.













5.3
          Benefits.  During the Employment Period, the Executive
will be entitled to receive such other benefits approved by the Reporting
Officer and made available to similarly situated senior executives of the
Company, including health insurance, disability insurance, and 401-K benefits.  At all times the Company agrees to maintain
Director’s and Officer’s Liability coverage for the Executive. Nothing
contained in this Agreement shall prevent the Company from changing insurance
carriers.


5.4           Employee Leave.  The Executive shall be entitled to all public
holidays observed by the Company, a total of 26 days of paid time off in
accordance with the applicable policies of the Company, which shall be taken at
a reasonable time or times per year.


6.             Expenses.  The Executive is expected and is authorized
to incur reasonable expenses in the performance of his duties hereunder,
including the costs of entertainment, travel, and similar business expenses
incurred in the performance of his duties. 
Company shall reimburse the Executive for all such expenses promptly
upon periodic presentation by the Executive of an itemized account of such
expenses and appropriate receipts.


7.             Termination
of Employment.


7.1.          Termination.  The Executive’s employment by the Company
during the Employment Period will continue until Executive’s death, Disability,
resignation or until Executive’s termination by the Board at any time.


7.2.          Notice of Termination.  Any termination of the Executive’s employment
by the Company or the Executive (other than because of the Executive’s death)
shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 10.1 hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon, if
any, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated.  Termination
of the Executive’s employment shall take effect on the Date of Termination.


8.             Compensation
Upon Termination.


8.1.          Death.  If the Executive’s employment is terminated
during the Employment Period as a result of the Executive’s death, the Company
shall pay to the Executive’s estate, or as may be directed by the legal
representatives of such estate, the Executive’s full Base Salary through the
next full calendar month following the Date of Termination and all other unpaid
amounts, if any, to which the Executive is entitled as of the Date of
Termination in connection with any fringe benefits pursuant to Section 5.3
and expenses pursuant to Section 6. The payments contemplated by this Section
8.1 shall be paid at the time they are due, and the Company shall have no
further obligations to the Executive or his or her estate under this Agreement.


8.2.          Disability.  If the Company terminates the Executive’s
employment during the Employment Period because of the Executive’s Disability,
the Company shall pay the Executive the Executive’s full Base Salary through
the third full calendar month following the Date of Termination and all other
unpaid amounts, if any, to which the Executive is entitled as of the Date of
Termination in connection with any fringe benefits pursuant to Section 5.3
and expenses pursuant to Section 6. The payments contemplated by this Section 8.2
shall be paid at the time they are due, and the Company shall have no further
obligations to the Executive under this Agreement; provided,
however, that the Base Salary shall be reduced by the amount of any
disability benefit payments made to the Executive during a period of Disability
from any insurance or other policies provided by the Company.



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8.3.          By the Company with Cause
or by the Executive without Good Reason.  If the Company terminates the Executive’s
employment during the Employment Period for Cause or if the Executive
voluntarily terminates the Executive’s employment during the Employment Period
other than for Good Reason, the Company shall pay the Executive the Executive’s
full Base Salary through the Date of Termination and all other unpaid amounts,
if any, to which Executive is entitled as of the Date of Termination in
connection with any fringe benefits pursuant to Section 5.3 and
expenses pursuant to Section 6.  The
payments contemplated by this Section 8.3 shall be paid at the time
such payments are due, and the Company shall have no further obligations to the
Executive under this Agreement.


8.4.          By the Company without
Cause or by the Executive for Good Reason.  If the Company terminates the Executive’s
employment during the Employment Period other than for Cause, Death, or
Disability or the Executive terminates his employment during the Employment
Period for Good Reason, the Company shall pay the Executive: (A) the
Executive’s full Base Salary through the Date of Termination and all other
unpaid amounts, if any, to which the Executive is entitled as of the Date of
Termination in connection with any fringe benefits pursuant to Section 5.2
and expenses pursuant to Section 6; and (B)  a lump-sum severance package equal to (i)
six  months of the Executive’s Base
Salary and (ii) an amount equal to six months of the average annual bonus
earned by the Executive during the previous two fiscal years (collectively the “Severance Payment”). The Severance Payment shall be payable
to the Executive within 30 days of the Notice of Termination.


9.             Other
Agreements.   As a
pre-condition to the effectiveness of this Agreement, Executive agrees to
execute the Employee Agreement attached hereto as Exhibit A (the “Employee Agreement”), the terms and conditions of which are
specifically incorporated herein by reference.


10.           Miscellaneous.


10.1.        Notices.  All notices, demands, requests or other
communications required or permitted to be given or made hereunder shall be in
writing and shall be delivered, telecopied or mailed by first class registered
or certified mail, postage prepaid, addressed as follows:


10.1.1.     If to the Company:


 


Liquidity Services, Inc.


2131 K Street NW, 4th Floor


Washington DC 20037


ATTN:  William P. Angrick, III, Chairman and CEO


Fax:       (202) 467-4030


Phone:  (202) 558-6205


 


10.1.2.     If to the Executive:


 


at the address set forth
in Schedule 1.


 


or to such other address as may be designated by
either party in a notice to the other. 
Each notice, demand, request or other communication that shall be given
or made in the manner described above shall be deemed sufficiently given or
made for all purposes three days after it is deposited in the U.S. mail,
postage prepaid, or at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the answer back, the confirmation (if
telecopy) or the affidavit of messenger being deemed conclusive evidence of
such delivery) or at such time as delivery is refused by the addressee upon
presentation.



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10.2.        Representations.  Executive agrees to execute any proper oath
or verify any proper document required to carry out the terms of this
Agreement.  Executive represents that
performance of all the terms of this Agreement and the Employee Agreement will
not breach any non-compete or similar agreement.  Executive has not entered into, and Executive
agrees not to enter into, any oral or written agreement in conflict herewith.


10.3.        Severability.  The invalidity or unenforceability of any one
or more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.


10.4.        Survival.  It is the express intention and agreement of
the parties hereto that the provisions of Section 8 hereof shall
survive the termination of employment of the Executive.  In addition, all obligations of the Company
to make payments hereunder shall survive any termination of this Agreement on
the terms and conditions set forth herein.


10.5.        Assignment.  The rights and obligations of the parties to
this Agreement shall not be assignable or delegable, except that (i) in the
event of the Executive’s death, the personal representative or legatees or distributees
of the Executive’s estate, as the case may be, shall have the right to receive
any amount owing and unpaid to the Executive hereunder and (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable to any
Affiliate of the Company or in connection with any subsequent merger,
consolidation, sale of all or substantially all of the assets of the Company or
similar reorganization of a successor corporation.


10.6.        Binding Effect.  Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.


10.7.        Amendment; Waiver.  This Agreement shall not be amended, altered
or modified except by an instrument in writing duly executed by the parties
hereto; provided, that the parties may amend Schedule 1 hereto by
executing and delivering a revised version of Schedule 1 and attaching
such revised version to this Agreement. 
Neither the waiver by either of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure of
either of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder,
shall thereafter be construed as a waiver of any subsequent breach or default
of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.


10.8.        Headings.  Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.


10.9.        Governing Law.  This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the District of Columbia
not including the choice of law rules thereof.


10.10.      Entire Agreement.
This Agreement, including Schedule 1 hereto and the Employee Agreement,
constitute the entire agreement between the parties respecting the employment
of Executive, there being no representations, warranties or commitments except
as set forth herein.



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10.11       Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.


10.12.      Definitions.


“Affiliate”
means as to a specified Person any other person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the specified Person.


“Agreement”
means this Executive Employment Agreement.


“Base Salary” is
defined in Section 5.1 above.


“Beneficial Owner”
means a beneficial owner within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended.


“Cause” means (i) the
commission of a felony or a crime involving moral turpitude (specifically
excluding felonies or crimes under any applicable state or federal vehicle
code) or the commission of any other act or omission involving dishonesty or
fraud with respect to the Company or any of its Subsidiaries or any of their
customers or suppliers, or (ii) recurring violations of material Company rules,
regulations policies or any material provisions of this Agreement (which are
not inconsistent with or in violation of any of the provisions of this
Agreement) after written notice to Executive from the Company specifically
enumerating all of the facts and circumstances constituting the violation, the
conduct or action which can be taken by Executive to cure the violation, and a
reasonable opportunity for Executive to take corrective action, or (iii)  gross negligence or willful misconduct with
respect to the Company or any of its Subsidiaries.


“Company”
means Liquidity Services, Inc. and its successors and assigns.


“Date of Termination”
means (i) if the Executive’s employment is terminated by the Executive’s
death, the date of the Executive’s death; (ii) if the Executive’s
employment is terminated because of the Executive’s Disability, 30 days after
Notice of Termination; (iii) if the Executive’s employment is terminated
by the Company for Cause or by the Executive for Good Reason, the date
specified in the Notice of Termination; or (iv) if the Executive’s
employment is terminated during the Employment Period other than pursuant to Section
7.1, the date on which Notice of Termination is given.


“Disability”
means the Executive’s inability to perform all of the Executive’s duties
hereunder by reason of illness, physical or mental disability or other similar
incapacity, as determined by a competent medical doctor appointed by the
Reporting Officer after a complete and thorough medical examination and
evaluation, which inability shall continue for more than three consecutive
months or for such shorter periods that when aggregated exceed six (6) months
in any twelve (12) month period.


“Effective Date”
means the date as of which this Agreement is executed as set out above.


“Employee Agreement”
is defined in Section 9 above.


“Employment Period” is
defined in Section 2 above.



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“Good Reason”
means (i) the Company’s failure to perform or observe any of the material
terms or provisions of this Agreement (including the provisions of Schedule 1)
or the Employee Agreement, and the continued failure of the Company to cure
such default within 30 days after written demand for performance has been given
to the Company by the Executive, which demand shall describe specifically the
nature of such alleged failure to perform or observe such material terms or
provisions; or (ii) a material reduction in the scope of the Executive’s
responsibilities and duties without the written consent of Executive; or (iii)
any change to the job title given to Executive without his written consent;
(iv) any reduction in Base Salary or any other benefits provided to Executive
hereunder; or (v) any constructive termination of Executive; (vi) any request,
instruction, directive or order, whether direct or indirect, to Executive by
the Board, the Company or any executive officer of the Company to perform any
act which is unlawful; or (vii) a requirement by the Company for the Executive
to relocate outside of the Washington DC metropolitan region to retain his
position without the written consent of the Executive.


“Notice of Termination”
is defined in Section 7.2 above.


“Person”
means an individual, a partnership, a limited liability company, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.


“Severance Payments”
is defined in Section 8.4 above.


IN WITNESS WHEREOF, the undersigned have duly executed
this Agreement, or have caused this Agreement to be duly executed on their
behalf, as of the day and year first hereinabove written.


 


	
  

  	
   

  	
  LIQUIDITY SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  William P. Angrick, III

  
	
   

  	
   

  	
   

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James E. Williams

  



 



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SCHEDULE 1


CERTAIN TERMS
OF EMPLOYMENT


All
capitalized but undefined terms in this Schedule shall have the meaning
ascribed to them in the Agreement.


Name:  James E. Williams


Position/Title:  Vice President, General Counsel and Secretary


Duties:  You will be responsible for supervising and
managing LSI’s legal, regulatory and compliance activities. As a member of the
Company’s senior management team you will work closely with LSI’s
President/COO, Chief Financial Officer and business unit heads regarding key
decisions involving operating policy and corporate development. Specific
responsibilities are summarized below.


A.                                   Supervise
and manage all legal affairs for the LSI organization, including but not
limited to regulatory compliance, commercial contracts, securities filings,
insurance matters, human resources matters and disputes with third parties, to
protect the Company’s interests;


B.                                     Supervise
and manage the Company’s relationship with its outside counsel Hogan &
Hartson, LLP and/or any other outside counsel retained by the Company to ensure
quality control and efficiencies;


C.                                     Interface
with the Company’s Board and special committees as necessary to provide advice
regarding legal and regulatory affairs, including but not limited to public
company legal compliance and disclosure matters;


D.                                    Serve
in the role of Corporate Secretary and maintain all appropriate documentation
in the corporate record book;


E.                                      Support
the Company’s capital raising activities and communications with interested
parties, such as shareholders, investors and analysts, to comply with all
relevant regulatory requirements;


F.                                      Support
and review all regulatory filings and disclosures associated with public
company status;


G.                                     Manage
and approve all insurance plans to mitigate company risk, including Directors
and Officers liability, property and casualty policies;


H.                                    Serve
as chief compliance officer with respect to employer-employee matters, investor
relations, and proper documentation of all corporate contracts and business
relationships;


I.                                         Promote
effective intellectual property documentation and systems to protect and
enhance the intellectual property assets of the Company;


J.                                        Support
the Company’s development of business monitors, controls and documentation as
appropriate to ensure the Company becomes compliant, and maintains compliance,
with Sarbanes Oxley requirements;


 













 


K.                                    Support
the evaluation, due diligence, documentation and closing process for Company
acquisitions, joint ventures and overall corporate development;


L.                                      Maintain
financial discipline across LSI through cost analysis, expense controls and
risk management techniques related to legal and regulatory affairs.


Employment Term:  Three Years from the Effective Date


Reporting Officer:  Chairman and CEO


Base Salary:  $175,000 per annum


Bonus:  Executive shall be eligible for an annual
incentive bonus one year from the Effective Date up to 33% of his Base Salary
based upon the achievement of certain deliverables or goals as agreed to by the
Executive and the Reporting Officer. 
These deliverables or goals will be agreed upon and approved by the
Board’s Compensation Committee within 30 days of the Effective Date and prior
to the start of each annual period.  The
Board’s Compensation Committee reserves the right to award a discretionary
bonus based on the Executive’s performance and contributions.


Equity Based
Compensation: Executive will receive options to purchase 55,000 shares of the
Company’s common stock (the “Common Stock”)
at a purchase price (the “Purchase Price”)
per common share of $7.00 (the “Options”).  The Options will be granted at the Company’s
next regularly scheduled Board meeting of December 2, 2005 pursuant to a stock
option agreement based on the Company’s standard form for its executives and
subject to the Company’s Stock Option and Incentive Plan.  The Options will vest as follows: 25% after
the first anniversary of your employment and, thereafter, monthly vesting for
the following 36 months. These Options will fully vest in the event the
Executive is terminated without Cause (as defined under this Agreement)
following a change in control of the Company.


Notice Address:


Current:


James E. Williams


2232 North Kentucky Street


Arlington, VA 22205


 


	
  COMPANY:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  William P.
  Angrick, III

  Chairman and CEO

  	
   

  	
  James E. Williams

  



 



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