**Exhibit 10.3.10.1**

 
|  | ** ** | **Employment Contract** |
|--|------------|-------------------------|

Westaff e-form ŸWestaff e-form Ÿ Westaffe-form Ÿ Westaff e-form ŸWestaff e-form Ÿ Westaffe-form Ÿ Westaff e-form

Electronic Form Template2/03 (emp_con.dot)

 

This contract is entered into by and between Westaff (USA), Inc. (“Westaff”)and

 
| Stephen Russo             |   | (“you”). |
|---------------------------|--------|--------------------|
| (full  name of employee). |   |               |

 

Westaff hereby agrees to hire you or continue your employment and youagree to accept employment or continue your employment with Westaff upon thefollowing terms and conditions:

 

**1. Duration.** Your employmentshall start or continue as of 7/1/04 and shall continue thereafter untilterminated by either party giving to the other two weeks’ advance notice oftermination. However, Westaff will not obliged to giveyou such advance notice if:

 

**a.** Terminationoccurs during the first year of your employment; or

**b.** You are apart-time employee; or

**c.** You acceptan offer of employment with a business competitive to Westaff; or

**d.**You are terminated for misconduct, violation of this Contract or violation ofWestaff’s policies or rules as set forth in Westaff’s Employee Handbook orotherwise made known to you.

 

**2. Terminable-At-Will.**You are a“terminable-at-will” employee. You may resign at any time with or without areason. Likewise, Westaff may dismiss you at any time with or without cause.You acknowledge that there are no other express or implied agreements betweenyou and Westaff for any specific period of employment, norfor continuing or long-term employment.

 

**3. Pay.**You will be paid abeginning salary of $ 180,000 per year or a wage of $ N/A per hour. Your paymay be revised without impairing the effectiveness of any other provisions ofthis Contract. Your pay will be paid in equal installments every two weeks.Each pay period is distinct and severable, and your employment for part of apay period or part of a year will not entitle you to pay for more than the timeyou actually worked. In the event your employment terminates during a payperiod, your pay will be prorated to the date of termination, and will includeearned vacation pay, if any.

 

**4. Confidentiality.**Westaff is aprovider of temporary staffing and employment services. You acknowledge that byvirtue of your employment, you will become familiar with or have access to Westaff’svaluable proprietary information, confidential data and trade secrets whichinclude but are not limited to, customers’ and employees’ names, addresses andtelephone numbers, bill and pay rates, employees’ pay and skills, otherstatistical information, sales techniques, methods of operation, advertisingmaterials, formulas and operating manuals. As the misappropriation of suchinformation, data or secrets would result in great damage or loss to Westaff.

 

**5. Non-Diversion.** You agree thatyou will not, directly or indirectly, either for yourself or for any otherperson, firm or corporation, solicit or attempt to divert any Westaff customeror recruit any Westaff employee during your Westaff employment and for a periodof one year thereafter. For purposes of this paragraph, a Westaff customer isdefined as any person, firm or corporation that Westaff has serviced within oneyear preceding the termination of your employment and with whom you have hadcontact on behalf of Westaff, and a Westaff employee is defined as any personwho has received salary or wages from Westaff within one year preceding thetermination of your employment.

 

*Vacation Accrual @ 4weeks per year.

 

Providing EssentialStaffing Services

 

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**6. Non-Competition (not applicable in California).**You agree to devote your best efforts to the performance of your Westaff dutiesand to perform no acts detrimental to Westaff’s best interests. You will notengage in any other business nor work for any other person or entity duringyour Westaff workday.  While employed byWestaff, you will not engage in any competitive temporary staffing oremployment services business. You further agree that you will not engage in acompetitive temporary staffing or employment services business, in a same orsimilar capacity in which you were employed by Westaff, for yourself or for anyother person, firm or corporation, within a radius of twenty-five miles fromthe Westaff office(s) where you were working for a period of one year after thetermination of your Westaff employment.

 

**7. Authority.** You shall have noauthority to enter into any contract or agreement or otherwise bind Westaffwithout the prior consent of an office of Westaff.

 

**8. Property.** Upon termination ofyour employment, you agree to immediately deliver to Westaff all equipment,supplies, keys, manuals, monies, overpayments, lists, records, resumes,diskettes or other material related to the business of Westaff and all Westaffproperty of whatever nature in your possession or control or which you may haveentrusted to any other party.

 

**9. Violation.** You acknowledgethat the obligations and restrictions set forth in this Contract are reasonablynecessary for the protection of Westaff’s business, goodwill, property,customer and employee relationships. You recognize that irreparable damage willresult to Westaff in the event of any violation of this Contract and herebyagree to the issuance of a restraining order and/or an injunction against youfor such a violation, in addition to any other legal or equitable remediesWestaff may have.

 

**10. Assignment.** Westaff’s rightsand/or duties under this Contract may be assigned or delegated to any successorof Westaff. However none of your right and/or duties under this contract may beassigned by you to any other party.

 

**11. Modification.** The terms ofthis Contract may be amended, modified or replaced only by a subsequent writtenagreement signed by you and an authorized representative of Westaff.

 

**12. Severability.** Everyprovision of this Contract is distinct and severable. If any such provision isheld to be illegal, unenforceable or void, it shall not affect the legality,enforceability or validity of any of the other provisions.

 

**13. Acknowledgment.** You herebyacknowledge that you have read and understood this Contract. By signing below,you acknowledge receipt of a copy of this Contract and agree to abide by itsterms and conditions.

 

 
| **Employee**:           |    /s/ Stephen J. Russo                  | ** ** | **Date**:     | 1 July 2004                             |
|-------------------------|---------------------------------------------------------|------------|---------------|-----------------------------------------|
| ** **              | (signature of  employee)                                | ** ** |          |
|                    |                                                    |       |
| **Westaff (USA), Inc.** |                                                    |       |
|                    |                                                    |       |
| **By**:                 |    /s/ Margaret Gonzalez                 | ** ** | **Location**: |    Walnut Creek, CA      |
| ** **              | (signature of  Westaff representative)                  | ** ** | ** **    | (City, State and Westaff office number) |
|                    |                                                    |       |
|                    |                                                    |       |          |
| **Title**:              |        H/R Asst.  II |       |          |                                    |
|                         |                                                         |            |               |                                         |  |  |  |

 

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**FIRST AMENDMENT**

**TO**

**EMPLOYMENT CONTRACT**

**BY AND BETWEEN**

**WESTAFF (USA), INC. AND STEPHENRUSSO**

 

The Employment Contractdated July 1, 2004 by and between Westaff (USA), Inc. (“Westaff”) and StephenRusso  (“You”) is hereby amended asfollows effective August 6, 2004.

 

The following paragraphis added to Section 3:

 

“You are eligible for transition compensation in theevent of a “Change in Control” and the “elimination of your job” as defined inExhibit I, attached hereto and incorporated by reference herein. The transitioncompensation will be in the form of a single lump sum cash payment equivalentto twenty-six (26) weeks of your then current pay less appropriatewithholdings, provided that you are an active regular employee at the time ofthe elimination of your  job, and youhave not voluntarily terminated employment prior to the elimination of yourjob. This payment is in addition to other compensation which may be provided toyou under the Westaff Transition Compensation Plan in effect at that time.”

 

All other terms and conditions of the above-referenced EmploymentContract shall remain in full force and effect unless otherwise amended herein.

 

 

**EMPLOYEE:**

 
| /s/ Stephen J. Russo    |                              |
|-------------------------|-----------------------------------|
| Stephen Russo           |
|                    |
|                    |
| **WESTAFF (USA), INC.** |
|                    |
|                    |
| By:                     | /s/ Dwight S. Pedersen            |   |
|                    | Dwight S. Pedersen, President and |
|                    | Chief Executive Officer           |
|                         |                                   |  |

 

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**EXHIBIT I**

**TO**

**FIRSTAMENDMENT**

**TO**

**EMPLOYMENT CONTRACT**

**BY AND BETWEEN**

**WESTAFF (USA), INC.  AND STEPHEN RUSSO**

 

1.               “Change of Control”means:

 

a.                                       sale, lease ordisposition of substantially all of the assets of  Westaff and its parent, Westaff , Inc. (“theParent”);

 

b.                                      anyconsolidation or merger of Westaff  and the Parent, with or into any othercorporation or other entity or person or any other corporate reorganization, inwhich the stockholder of Westaff and  theParent immediately prior to such consolidation, merger or reorganization, ownless than 50% of Westaff’s and the Parent’s voting power immediately after suchconsolidation, merger or reorganization; or

 

c.                                       anytransaction or series of related transactions to which Westaff and the Parentis a party in  which in excess of fiftypercent (50%) of Westaff’s and the Parent’s voting power is transferred.

 

2.               “Elimination ofyour job” means:

 

a.                                       withinone (1) year following a Change in Control your job is eliminated; and

 

b.                                      youhave not been offered a position similar in responsibility, skill requirementsand work schedule as your current position; and

 

c.                                       youhave not been offered a position for which the salary offered would require nomore than 10% reduction in your then current pay.

 

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**SECOND AMENDMENT**

**TO**

**EMPLOYMENT CONTRACT**

**BY AND BETWEEN**

**WESTAFF (USA), INC. AND STEPHENRUSSO**

 

The Employment Contractdated July 1, 2004 by and between Westaff (USA), Inc. (“Westaff”) and StephenRusso (“You”) and amended effective August 6, 2004 is further amended effectiveSeptember 19, 2004:

 

Item 1 in Exhibit1 to the Employment Contract (the definition of “Change of Control”) is deletedin its entirety and replaced with the following:

 

“Change in Control” means:

 

•                  The sale, leaseor disposition of substantially all of the assets of the Westaff  (directly or indirectly) and itsparent, Westaff, Inc. (“the Parent”);

 

•                  Anyconsolidation or merger of Westaff and the Parent with or into any othercorporation or other entity or person, or any other corporate reorganization,in which the stockholders of Westaff and the Parent immediately prior to suchconsolidation, merger or reorganization, own less than 50% of  Westaff’s and the Parent’s votingpower immediately after such consolidation, merger or reorganization; or

 

•                  A change inownership or control of Westaff or the Parent effected through any of thefollowing transactions:

 

(i)                                     anytransaction or series of related transactions as a result of which any personor related group of persons initially becomes the beneficial owner (within themeaning of Rule 13d-3 of the Securities Exchange Act of 1934), directly orindirectly, of securities possessing more than fifty percent (50%) of the totalcombined voting power of Westaff’s or the Parent’s then outstanding votingsecurities.  For purposes of thissub-paragraph, the term “person” shall exclude (i) a trustee or other fiduciaryholding securities under an employee benefit plan of the Parent or of asubsidiary and (ii) a corporation owned directly or indirectly by thestockholders of the Parent in substantially the same proportions as theirownership of the common stock of the Parent;

 

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

 

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

 

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All other terms and conditions of the above-referenced EmploymentContract shall remain in full force and effect unless otherwise amended herein.

 

 

**EMPLOYEE:**

 

 
| /s/ Stephen J. Russo    |                              |
|-------------------------|-----------------------------------|
| Stephen Russo           |
|                    |
|                    |
| **WESTAFF (USA), INC.** |
|                    |
|                    |
| By:                     | /s/ Dwight S. Pedersen            |   |
|                    | Dwight S. Pedersen, President and |
|                    | Chief Executive Officer           |
|                         |                                   |  |

 

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**THIRD AMENDMENT**

**TO**

**EMPLOYMENT CONTRACT**

**BY AND BETWEEN**

**WESTAFF (USA), INC. AND STEPHENRUSSO**

 

The Employment Contractdated August 17, 2005 by and between Westaff (USA), Inc. (“Westaff”) andStephen Russo (“You”) and amended effective August 6, 2004, and amended furthereffective September 19, 2004 is further amended effective August 17, 2005:

 

The following clause isadded as subparagraph d. to Exhibit 1, Item 2 to the Employment Contract, ‘“Eliminationof your job” means:’

 

d.                                      and you have not been offered a positionthat would require you to travel 30 miles or less from your current primaryplace of work.

 

All other terms and conditions of the above-referenced EmploymentContract shall remain in full force and effect unless otherwise amended herein.

 

 

**EMPLOYEE:**

 

 
| /s/ Stephen J. Russo    |                              |
|-------------------------|-----------------------------------|
| Stephen J. Russo        |
|                    |
|                    |
| **WESTAFF (USA), INC.** |
| ** **              |
|                    |
| By:                     | /s/ P. M. Newman                  |   |
|                    | Patricia M. Newman, President and |
|                    | Chief Executive Officer           |
|                         |                                   |  |

 

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