Document:

Exhibit 10.1

 

PRAECIS PHARMACEUTICALS INCORPORATED

SECOND AMENDED AND RESTATED EMPLOYEE STOCK
PURCHASE PLAN

 

PRAECIS PHARMACEUTICALS INCORPORATED, a
Delaware corporation (the “Company”), establishes this Second Amended and
Restated Employee Stock Purchase Plan (the “Plan”) so that Eligible Employees
(as defined herein), if any, may be granted options to purchase Common Stock,
par value $.01 per share, of the Company (“Common Stock”).

 

1.                                       Purpose.

 

The Plan provides Eligible Employees an
opportunity to acquire shares of Common Stock under circumstances which enable
them to obtain the income tax benefits described in Section 423 of the Internal
Revenue Code of 1986, as amended (the “Code”). 
The Plan is intended to provide employees an incentive to continue to
promote the Company’s best interests and to enhance its long-term performance.

 

2.                                       Definitions.

 

Wherever used, the following words and
phrases will have the meanings stated below unless a different meaning is
plainly required by the context:

 

“Affiliated Company” means any subsidiary corporation of the Company,
as defined in Section 424(f) of the Code.

 

“Applicable Grant Date” means for any Option the date on which such
Option was granted, which shall be a Semiannual Grant Date.

 

“Board” means the Board of Directors of the Company.

 

“Committee” means a committee appointed by the Board to which the Board
may (but shall not be required to) delegate its powers to administer the Plan.

 

“Compensation” means the total cash remuneration a Participant receives
during an Exercise Period as salary or wages, including overtime pay and
bonuses and excluding all other forms of remuneration.

 

“Disability” means permanent and total disability as defined in Section
22(e)(3) of the Code.

 

“Effective Date” means July 3, 2000.

 

“Eligible Employee” means each person who, on an applicable Semiannual
Grant Date, is employed by the Company or an Affiliated Company and has been an
employee for six (6) or more months at that date.  An employee will not be eligible to
participate during an Exercise Period if his or her customary employment as of
the first day of the period is either (i) less than 20 hours per week or (ii) 5
months or less on a calendar year basis. 
No employee will be eligible if he or she is on an applicable Semiannual
Grant Date an owner of 5% or more of the

 

 

outstanding capital stock of the Company or an Affiliated Company, as
determined under Section 424(d) of the Code.

 

“Exercise Date” means any date on which an Eligible Employee purchases
Common Stock pursuant to an Option under the Plan, which shall, with respect to
each Option, be the last day of the Exercise Period in which such Option is
granted.

 

“Exercise Period” means the approximate six-month period commencing on
each of July 3, 2000, January 1, 2001, July 2, 2001, December 31, 2001, July 1,
2002,  December 30, 2002, June 30, 2003,
December 29, 2003, June 28, 2004, January 3, 2005, June 27, 2005, January 2,
2006, June 26, 2006 and January 1, 2007, and ending at 5 p.m. (Boston time) on
each of December 31, 2000, July 1, 2001, December 30, 2001, June 30, 2002,
December 29, 2002, June 29, 2003, December 28, 2003, June 27, 2004, January 2,
2005, June 26, 2005, January 1, 2006, June 25, 2006, December 31, 2006 and June
24, 2007, respectively.  If the Plan is terminated,
then the Exercise Period in which it is terminated shall end on the date
immediately preceding the effective date of such termination.

 

“Fair Market Value Per Share of Common Stock” on the day of
determination shall mean the last sale price per share of Common Stock on such
day reported on the Nasdaq National Market as published in The Wall Street
Journal or, if no such sale is so reported, the average of the reported closing
bid and asked prices on such day in the over-the-counter market, as furnished
by the National Association of Securities Dealers Automated Quotation System,
or, if such price at the time is not available from such system, as furnished
by any similar system then engaged in the business of reporting such prices and
selected by the Board or, if there is no such system, as furnished by any
member of the National Association of Securities Dealers, selected by the
Board.  If the Common Stock is neither
reported on the Nasdaq National Market nor traded on the over-the-counter
market, fair market value shall be such value as the Board, in good faith,
determines.  Notwithstanding any
provision of the Plan to the contrary, no determination made with respect to
the Fair Market Value Per Share of Common Stock subject to an Option shall be inconsistent
with Section 423 of the Code.

 

“Initial Notice Period” means the period beginning on the Effective
Date and ending on the 15th day thereafter.

 

“Notice Period” means that period beginning 30 days prior to the
applicable Semiannual Grant Date (other than the first Semiannual Grant Date)
and ending on the 15th day prior to said date.

 

“Option” means an option granted hereunder which will entitle an
Eligible Employee to purchase shares of Common Stock.

 

“Option Price” means the lower of: 
(1) 85% of the Fair Market Value Per Share of Common Stock as of the
Applicable Grant Date on which the Option being exercised was granted or (2)
85% of the Fair Market Value Per Share of Common Stock as of the Exercise Date
on which such Option is exercised.

 

“Participant” means an Eligible Employee who has elected to participate
in the Plan during the period between such election and the termination of such
Eligible Employee’s participation in the Plan.

 

2

 

“Retirement” means a termination of a Participant’s employment with the
Company on or after the first day of the month of a Participant’s 65th
birthday.

 

“Semiannual Grant Date” means each of July 3, 2000, January 1, 2001,
July 2, 2001, December 31, 2001, July 1, 2002, 
December 30, 2002, June 30, 2003, December 29, 2003, June 28, 2004,
January 3, 2005, June 27, 2005, January 2, 2006, June 26, 2006 and January 1,
2007.

 

“Withholding Account” means a bookkeeping record of all amounts
withheld during an Exercise Period for a specific Eligible Employee, which are
available for the exercise of an Option granted hereunder.  Specific segregation of funds is not
required.

 

3.                                       Administration.

 

The Plan shall be administered by the Board,
which, to the extent it shall determine, may delegate its powers with respect
to the administration of the Plan (except its powers to terminate or amend the
Plan) to the Committee.  If the Board
chooses to appoint a Committee, references hereinafter to the Board shall be
deemed to refer to the Committee. 
Subject to the express provisions of the Plan, the Board may interpret
the Plan, prescribe, amend and rescind rules and regulations relating to it,
determine the terms and provisions of the Options granted hereunder and make
all other determinations necessary or advisable for the administration of the
Plan; provided, however, that all such interpretations, rules, determinations,
terms and conditions shall be made and prescribed in the context of preserving
the tax treatment of the Options under this Plan granted to Eligible Employees
subject to United States federal income taxation and preserving the tax
treatment of the Plan itself under Section 423 of the Code.  The determinations of the Board on all
matters regarding the Plan shall be conclusive.

 

4.                                       Maximum
Shares to be Granted under the Plan.

 

The aggregate number of shares of Common
Stock available for issuance upon the exercise of Options granted pursuant to
Section 5 shall be four hundred thousand (400,000) shares.  Shares of Common Stock delivered pursuant to
the Plan will be authorized but unissued shares or treasury shares.  In the event that any Option granted pursuant
to Section 5 expires or is terminated, surrendered or cancelled without being
exercised, in whole or in part, for any reason, the number of shares of Common
Stock theretofore subject to such Option shall again be available as shares
underlying Options which may be granted for grant at the next Semiannual Grant
Date pursuant to Section 5 and shall increase the aggregate number of shares of
Common Stock underlying Options available for grant during the succeeding
Exercise Period.

 

5.                                       Eligibility
for Participation and Granting of Options.

 

(a) 
Each employee of the Company who enrolls in the Plan and who is an
Eligible Employee on an applicable Semiannual Grant Date is granted without any
further action by the Board an Option hereunder which will entitle him or her
to purchase, on the immediately following Exercise Date at the Option Price per
share for Options granted on such date,

 

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shares of Common Stock equal in value up to ten percent (10%) of the
Eligible Employee’s Compensation during the Exercise Period divided by such
applicable Option Price per share of Common Stock.

 

(b)  If
the number of shares of Common Stock for which Options are granted pursuant to
Section 5(a) exceeds the applicable number provided for in Section 4, then the
Options granted under Section 5(a) to all Eligible Employees shall, in a
nondiscriminatory manner, be reduced on a pro rata basis in a manner which the
Board determines to be consistent with Section 423 of the Code.

 

(c)  No
Eligible Employee shall be granted an Option under the Plan which permits his
or her rights to purchase stock under all employee stock purchase plans (as
defined in Section 423 of the Code) of the Company and any Affiliated Company
to accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined at the time of the grant of such Option) for each calendar year in
which such Option is outstanding at any time. 
Any Option granted under the Plan shall be deemed to be modified to the
extent necessary to satisfy this Section 5(c).

 

6.                                       Terms of
Options.

 

(a) 
Each Option shall automatically be exercised on the last day of the
Exercise Period for such Option, using the funds which have accrued in a
Participant’s Withholding Account as of such day, unless the Participant
withdraws from the Plan or is deemed to withdraw during the Exercise
Period.  An Option granted hereunder may
be exercised only through the use of the funds which have accrued in a
Participant’s Withholding Account.  Any
Option, to the extent unexercised on the Exercise Date, shall expire on the
Exercise Date.

 

(b)  As
soon as reasonably possible following exercise in accordance with Section 6(a)
and upon the Participant’s written request, a certificate representing the
whole number of shares of Common Stock purchased, registered in the name of the
Participant, shall be delivered to the Participant or to such other person
designated by the Participant, including, without limitation, the Participant’s
broker.

 

(c)  A
Participant shall be deemed to have withdrawn from participation in the Plan
upon the occurrence of any of the following events:

 

(i)            Voluntary
Discontinuance while Employed.  A
Participant may discontinue his or her election and withdraw from the Plan by
giving written notice to the Company, no later than the third business day
prior to the end of the then-ongoing Exercise Period, specifying that the
Participant is so withdrawing from the Plan; provided, however, that a
Participant who shall have so discontinued his or her election to participate
and withdrawn from the Plan may not participate in the Plan during the next
following Exercise Period.  Upon such a
voluntary discontinuance of participation, amounts withheld from compensation
during the Exercise Period will be refunded

 

4

 

(ii)           Termination
of Employment.  Unless employment has
terminated due to Retirement, Disability or death, a Participant will be deemed
to have discontinued participation on the first day of the Exercise Period in
which such Participant’s termination of employment occurs and amounts withheld
from compensation during the Exercise Period will be refunded.

 

(iii)          Retirement.  In the event a Participant’s employment
terminates because of Retirement during the first three months of an Exercise
Period, the Participant will be deemed to have discontinued participation on
the first day of the Exercise Period in which Retirement occurs and amounts
withheld from Compensation during the Exercise Period will be refunded.  If Retirement occurs during the last three
months of the Exercise Period, the Participant will continue to participate
through the balance of the Exercise Period in which Retirement occurs (without
further withholding) unless he or she elects a voluntary discontinuance during
that Exercise Period.

 

(iv)          Death
or Disability.  In the event the
employment of the Participant by the Company or an Affiliated Company
terminates as a result of the Participant’s Disability or death, the
Participant will be deemed to participate (without further withholding) through
the balance of the Exercise Period in which death or Disability occurs, unless
he or she (or the executor, administrator or representative, as the case may
be) elects a voluntary discontinuance during that Exercise Period.

 

(v)           Levy
or Attachment.  The filing with or
levying upon the Company or the custodian of any judgment, attachment,
garnishee or other court order affecting the Participant’s account under the
Plan will automatically terminate such Participant’s participation in the Plan
and amounts withheld from compensation during the Exercise Period will be
refunded.

 

(vi)          Plan
Termination/Expiration.  Subject to
Section 12(b), termination of the Plan will terminate the participation of all
Participants in the Plan.

 

(d)  A
Participant’s employment shall not be deemed terminated by reason of a transfer
to another employer which is related to the Company within the meaning of
Sections 424(e) or (f) of the Code.  A
Participant who has elected participation under the Plan who is absent from
work with the Company or with an Affiliated Company because of temporary
disability (any disability other than a permanent and total Disability) or who
is on leave of absence for a period of less than 90 days shall not, during the
period of any such absence, be deemed, by virtue of such absence alone, to have
terminated employment.  In the case of a
leave of absence which is longer than 90 days, a Participant will not be deemed
to have terminated employment until the later of the 91st day of such leave or,
if later, such date as the Participant’s reemployment rights are not protected
by contract or law.

 

(e) 
Upon the discontinuance of an election and withdrawal from the Plan by a
Participant, all withheld amounts in such Participant Withholding Account shall
be transferred to such Participant within thirty (30) days of such discontinuance
and withdrawal, except to the extent such withheld amounts are applied to the
exercise of an Option as provided above. 
In no event shall any amounts be withheld from a Participant’s
Compensation

 

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for allocation to such Participant’s Withholding Account after the date
such Participant’s employment shall cease.

 

(f)  In
no event may any discontinuance of a Participant’s election and withdrawal from
the Plan be in respect to a portion rather than all of such Participant’s
Withholding Account on such date.

 

7.                                       Payment for
Common Stock Through Withholding.

 

(a)  Employee
Contributions

 

Each Eligible Employee may elect to
participate in  the Plan by filing an
enrollment application and payroll withholding form with his or her employer’s
payroll department during the Initial Notice Period or during a Notice Period,
which election shall be effective in the case of an election filed during the
Initial Notice Period, for the Exercise Period commencing on the Effective Date
and all subsequent Exercise Periods, or, in the case of an election filed
during a Notice Period, for the next Exercise Period and for all subsequent
Exercise Periods, until, in any case, such Participant’s participation in the
Plan terminates.  Each Eligible Employee
who elects to participate shall specify the amount of his or her contributions
to be made by payroll deduction by specifying a whole percentage from 1% to 10%
of such Participant’s Compensation payable for each payroll period.

 

No interest shall accrue or be payable to any
Participant in the Plan with respect to any sums withheld at the Participant’s
election, whether such sums be applied to purchase Common Stock, or are
returned to the Participant.

 

Payroll deductions may be increased by a
Participant only during a subsequent Notice Period, but may be decreased, upon
the Participant’s written election, effective as of the first payroll period
for which it is administratively practical to put the decrease into effect.

 

(b)  Application
of Payroll Contributions

 

The Company shall maintain a separate account
into which it shall deposit all amounts withheld for payment of shares of
Common Stock and shall maintain sufficient records reflecting each Participant’s
Withholding Account.

 

On the last day of each Exercise Period all
amounts in a Participant’s Withholding Account shall be paid over to the
Company in payment of the Option Price for the number of whole shares of Common
Stock which can be purchased on such date with such withheld total amount,
unless otherwise directed in accordance with Section 6 above.  In lieu of fractional shares, unapplied cash
shall be carried forward to the next Exercise Period unless the Participant
requests a cash payment.

 

6

 

8.                                       Transferability
of Options and Common Stock.

 

(a)  No
Option may be transferred, assigned, pledged or hypothecated (whether by
operation of law or otherwise), except as provided by will or the applicable
laws of descent or distribution, and no Option shall be subject to execution,
attachment or similar process.  Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
an Option, or levy of attachment or similar process upon the Option not
specifically permitted herein shall be null and void and without effect.  An Option may be exercised only by the
Eligible Employee during his or her lifetime, or by his or her legal
representative if permitted by Section 423 of the Code, or pursuant to Section
6 by his or her estate or the person who acquires the right to exercise such
Option upon his or her death by bequest or inheritance.

 

(b) 
Participants in the Plan who wish to avail themselves of the favorable
tax benefits of Section 423 of the Code may not transfer or otherwise dispose
of shares of Common Stock acquired by them or on their behalf under the Plan
(other than in the case of a Participant’s death) until after the later of one
year from the date of acquisition of said shares and two years after the Applicable
Grant Date of the Option pursuant to which said shares of Common Stock were
acquired.

 

(c) 
Each Eligible Employee who receives shares of Common Stock pursuant to
the Plan agrees, by electing to participate, to notify the Company, in writing,
immediately after such Participant makes a Disqualifying Disposition of any
shares acquired pursuant to the exercise of an Option under the Plan.  A Disqualifying Disposition is any
disposition (including any sale) of such shares before the later of two years
after the Applicable Grant Date for said Option or one year after the receipt
of shares pursuant to the exercise of said Option.  If the Participant has died before such stock
is sold, these holding period requirements do not apply and no Disqualifying
Disposition can occur thereafter.

 

9.                                       Adjustment
Provisions.

 

The aggregate number of shares of Common
Stock with respect to which Options may be granted, the aggregate number of
shares of Common Stock subject to each outstanding Option and the Option Price
per share of each Option shall all be appropriately adjusted if any of the
following occur after the Plan’s adoption by the Board:  any increase or decrease in the number of
shares of issued Common Stock resulting from a subdivision or consolidation of
shares, whether through reorganization, recapitalization, stock split, stock
distribution or combination of shares, or the payment of a share dividend or
other increase or decrease in the number of such shares outstanding effected
without receipt of consideration by the Company.  Adjustments shall be made according to the
sole discretion of the Board, and its decision shall be binding and conclusive.

 

10.                                 Dissolution, Merger
and Consolidation

 

Upon the dissolution or liquidation of the
Company, or upon a merger or consolidation of the Company in which the Company
is not the surviving corporation, the holder of each Option then outstanding
under the Plan will thereafter be entitled to receive at the next Exercise Date
upon the exercise of such Option for each share of Common Stock as to which
such Option shall be exercised, as nearly as reasonably may be determined, the
cash,

 

7

 

securities and/or property which a holder of one share of the Common
Stock was entitled to receive upon and at the time of such transaction.  The Board shall take such steps in connection
with such transactions as the Board shall deem necessary to assure that the
provisions of this Section 10 shall thereafter be applicable, as nearly as
reasonably may be determined, in relation to the said cash, securities and/or
property as to which such holder of such Option might thereafter be entitled to
receive.

 

11.                                 Stockholder
Approval.

 

The Plan is subject to approval by the
holders of a majority of the outstanding shares of Common Stock (and the
holders of any other class of stock to the extent required by law, agreement or
Section 423 of the Code) within 12 months before or after the date of adoption
of the Plan by the Board.  The Plan shall
be null and void and of no effect if the foregoing condition is not fulfilled.

 

12.                                 Miscellaneous

 

(a)  Legal
and Other Requirements.  The
obligations of the Company to sell and deliver Common Stock under the Plan
shall be subject to all applicable laws, regulations, rules and approvals,
including, but not by way of limitation, the effectiveness of a registration
statement under the Securities Act of 1933, as amended, if deemed necessary or
appropriate by the Company.  Certificates
for shares of Common Stock issued hereunder may be legended to such effect as
the Board shall deem appropriate.

 

(b)  Termination
and Amendment of Plan.  Except as
provided in the following sentence, the Plan may be terminated or amended by
the stockholders of the Company, by the Board, or by the Committee, including
amendment of the Plan from time to time to designate corporations whose
employees may be offered options under the Plan from among a group consisting
of the Company and any corporation which is or becomes its Affiliate.  Amendments effecting:  (1) any increase in the aggregate number of
shares of Common Stock which may be issued under the Plan (other than an
increase merely reflecting a change in capitalization such as a stock dividend
or stock split) or (2) changing the designation of corporations whose employees
may be offered options under the Plan, except designations described in the
preceding sentence, must be approved by the stockholders of the Company within
twelve (12) months after such amendment is adopted by the Board or by the
Committee or such amendment is void ab initio. 
No amendment to the Plan shall affect any Options theretofore granted or
any Common Stock theretofore acquired by a Participant, unless such amendment
shall expressly so provide and unless any Participant to whom an Option has
been granted who would be adversely affected by such amendment consents in
writing thereto.  Unless otherwise
determined by the Board, no Options will be granted under the Plan after
January 1, 2007.  The Plan shall expire
on June 25, 2007, unless extended or earlier terminated in accordance with the
terms hereof.

 

(c)  Withholding
Taxes.  Upon a Disqualifying
Disposition, within the meaning of Section 8(d), of any shares of Common Stock
received pursuant to the exercise of any Option under the Plan, the Company
shall have the right to require the Participant to remit to the Company an
amount sufficient to satisfy all federal, state and local requirements as to
income tax withholding and employee contributions to employment taxes or,
alternatively, in the

 

8

 

Board’s sole discretion, the Company may withhold all such amounts from
other compensation due to the Participant by the Company.

 

(d)  Right
to Terminate Employment.  Nothing in
the Plan or any agreement entered into pursuant to the Plan shall confer upon
any Eligible Employee or other optionee the right to continue in the employment
of the Company or any Affiliated Company or affect any right which the Company
or any Affiliated Company may have to terminate the employment of such Eligible
Employee or other optionee.

 

(e)  Rights
as a Stockholder.  A Participant
shall not have any right as a stockholder of the Company with respect to shares
of Common Stock issuable pursuant to the exercise of an Option hereunder,
unless and until a certificate or certificates for such shares of Common Stock
are issued to him or her or the Company reflects the Participant’s ownership in
its stock ledger or other appropriate record of Common Stock ownership.

 

(f)  Leaves
of Absence.  The Board shall be
entitled to make such rules, regulations and determinations as it deems
appropriate under the Plan in respect of any leave of absence taken by any
Eligible Employee, provided such rules are consistent with Section 423 of the
Code.

 

(g)  Notices.  Every direction, revocation or notice
authorized or required by the Plan shall be deemed delivered to the Company (1)
on the date it is personally delivered to the Treasurer of the Company (or such
other person as may be designated by the Company from time to time with notice
given to each Participant) at its principal executive offices or (2) three
business days after it is sent by registered or certified mail, postage
prepaid, addressed to the Treasurer of the Company (or such other person as may
be designated by the Company from time to time with notice given to each
Participant) at such offices or (3) on the date on which delivery was
guaranteed by a third party business (such as Federal Express and including the
postage service); and shall be deemed delivered to a Participant (A) on the
date it is personally delivered to him or her or (B) three business days after
it is sent by registered or certified mail, postage prepaid, addressed to him
or her at the last address shown for him or her on the records of the Company
or of any Affiliate or (C) on the date on which delivery was guaranteed by a
third party business (such as Federal Express and including the postal
service), provided that the documents were sent to him or her at the last
address shown for him or her on the records of the Company or of any Affiliate.

 

(h)  Uniformity.  All Eligible Employees shall have the same
rights and privileges under the Plan, except that the amount of Common Stock
which may be purchased under Options granted under the Plan shall bear a
uniform relationship to the Compensation of Eligible Employees.  All rules and determinations of the Board in
the administration of the Plan shall be uniformly and consistently applied to
all persons in similar circumstances.

 

(i)  Applicable
Law.  All questions pertaining to the
validity, construction and administration of the Plan and Options granted
hereunder shall be determined in conformity with the laws of the Commonwealth
of Massachusetts, to the extent not inconsistent with Section 423 of the Code
and the regulations thereunder.

 

9Exhibit 10.29

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This
Executive Employment Agreement (this “Agreement”) is between Noel Wheeler (“Executive”)
and Labor Ready Acquisition Sub II, Inc.(the “Company”), and is effective
as of May 27, 2005.

 

RECITALS

 

A.                                    Executive has served in a management or
executive capacity with CLP Resources, Inc. (“Resources”), CLP Holdings
Corp. (“Holdings”), and Contractors Labor Pool, Inc. (jointly referred to
herein as “CLP”) since September 1, 1999. 
In this capacity, Executive has served a key role on the executive team
and has had company-wide management responsibility.  Executive and CLP have entered into a
contract dated September 1, 1999 (“CLP Employment Agreement”).

 

B.                                    The Company, Labor
Ready, Inc. (“Labor Ready”), Holdings and others are negotiating an
agreement (the “Merger Agreement”) involving the merger of the Company with
Holdings (the “Merger”).  The entry into
this Agreement by the Company and Executive is a condition of the closing of
the Merger.

 

C.                                    As a result of the Merger,
the surviving corporation after the Merger will become a wholly-owned
subsidiary of Labor Ready (Labor Ready and all of its subsidiaries, including
the surviving corporation after the Merger, are collectively referred to herein
as the “Labor Ready Group”).

 

D.                                    In Executive’s employment with the Company,
Executive is expected to have access to confidential and propriety information
of the Labor Ready Group which is vital to the ability of the Labor Ready Group
to compete in all of its locations.

 

E.                                      Executive wishes to be employed by the
Company and the Company wishes to employ Executive under the terms and
conditions stated in this Agreement subject to the closing of the Merger, with
the understanding that the employment of Executive is likely to be transferred
to another member of the Labor Ready Group in accordance with the terms of this
Agreement.

 

I.                                         COMPENSATION AND POSITION.

 

A.                                    Employment.  In
consideration of the covenants and promises contained herein and the promise of
payment to Executive set forth in section I.C, below, and other good and
valuable consideration, the Company hereby agrees to employ Executive and
Executive hereby agrees to be employed by the Company, upon the terms and
conditions hereinafter set forth.

 

B.                                    Effective Date.  Executive’s
employment pursuant to this Agreement shall become effective (the “Effective
Date”) immediately upon closing of the Merger without further actions.  If the Merger is not completed, this
Agreement will be automatically terminated.

 

 

C.                                    Position and Compensation.

 

1.                                       Executive’s initial
base salary under this Agreement shall be at the annual rate of $250,000.

 

2.                                       Subject to the approval of the Labor Ready
Board of Directors, following the closing of the Merger and approval of the
Labor Ready, Inc. 2005 Long-Term Equity Incentive Plan (the “Plan”) by
Labor Ready’s shareholders, Executive will receive an option grant for 42,574
shares of the common stock of Labor Ready in accordance with and subject to the
terms and conditions of the Plan.

 

3.                                       Subject to the approval of the Labor Ready Board
of Directors, following the closing of the Merger and approval of the Plan by
Labor Ready’s shareholders, Executive will receive a grant of 17,668 shares of
restricted stock of Labor Ready in accordance with and subject to the terms and
conditions of the Plan.

 

4.                                       Bonuses.

 

(a)                                  Executive Bonus. 
Executive shall be eligible to receive an Executive Bonus of up to 25%
of Executive’s then current salary, subject to eligibility requirements and
terms described below.   The amount
of this Executive Bonus if any, will be determined by the President of Labor
Ready within two weeks after the press release of the prior year’s results (“Reconciliation
Date”), and shall be paid (subject to taxes and withholdings) within seven days
after the Reconciliation Date.  The Executive Bonus shall be determined as
follows:

 

(i)                                     12.5% of Executive’s Adjusted Salary if
the business units under Executive’s management (CLP) reach the EBITDA target
assigned by the President of Labor Ready. 
“Adjusted Salary” means Executive’s base salary adjusted by a multiplier
determined by the President of Labor Ready. 
For 2005, the multiplier will range from 0.5 to 1.2.  The full 12.5% can be earned for reaching the
full EBITDA target.  A prorated amount of
the bonus will be earned for EBITDA levels between 90% and 125% of the EBIDTA
target, based on the following metrics:

 

	
  Achievement

  	
   

  	
  Bonus Award

  
	
  125% of the EBITDA target

  	
   

  	
  125% of the target bonus

  
	
  100% of the EBITDA target

  	
   

  	
  100% of the target bonus amount

  
	
  90% of the EBITDA target

  	
   

  	
  50% of the target bonus amount

  
	
  Less than 90% of the EBITDA target

  	
   

  	
  No bonus.

  

 

(ii)                                  12.5% of Executive’s Adjusted Salary if
the audited net after-tax profit of Labor Ready meets or exceed annual targets
established by Labor Ready according to the Short-Term Incentive Plan set forth
in the Proxy Statement for the Annual Meeting of Shareholders, dated Wednesday,
May 18, 2005.   “Adjusted Salary” means Executive’s base
salary adjusted by a multiplier determined by the President of Labor
Ready.  For 2005, the multiplier will
range from 0.5 to 1.2.  At least 25% of
the payment must be made in restricted

 

2

 

stock.  The full 12.5% can be
earned for reaching the full growth target. 
A prorated amount of the bonus will be earned for growth levels between
50% and 125% of the growth target, based on the following metrics:

 

	
  Achievement

  	
   

  	
  Bonus Award

  
	
  125% of the growth target

  	
   

  	
  125% of the target bonus

  
	
  100% of the growth target

  	
   

  	
  100% of the target bonus amount

  
	
  50% of the growth target

  	
   

  	
  50% of the target bonus amount

  
	
  Less than 50% of the growth target

  	
   

  	
  No bonus. 

  

 

(b)                                 Transition Bonus.                                               For only the fiscal years for 2005 and
2006, Executive shall also be eligible for a Transition Bonus; as such plan may
be amended from time to time, subject to requirements set forth below. 
Executive will have a 2005 and 2006 EBITDA target amount for the business units
under Executive’s management (CLP) as assigned by the President of Labor Ready.

 

The Transition Bonus shall be in the gross amount of $100,000 if the
EBITDA of the business units under Executive’s management equals or exceeds
such targets.  A prorated amount of the bonus will be earned for reaching
EBITDA levels between 90% and 125% of the EBIDTA target, based on the following
metrics:

 

	
  Achievement

  	
   

  	
  Bonus Award

  
	
  125% of the EBITDA target

  	
   

  	
  125% of the target bonus

  
	
  100% of the EBITDA target

  	
   

  	
  100% of the target bonus amount

  
	
  90% of the EBITDA target

  	
   

  	
  50% of the target bonus amount

  
	
  Less than 90% of the EBITDA target

  	
   

  	
  No bonus. 

  

 

The amount of this Transition Bonus if any, will be determined by the
President of Labor Ready upon the Reconciliation Date, as defined above, and
shall be paid (subject to taxes and withholdings) within seven days after the
Reconciliation Date.

 

(c)                                  Bonus Eligibility.  To be eligible for the Executive
or the Transition Bonus, Employee must be employed by Company or Labor Ready on
the Reconciliation Date for such bonus and must be in compliance with Employee’s
obligations under this Agreement. Notwithstanding the foregoing, if Company or
Labor Ready terminates Employee’s employment prior to such date for either
year, if such termination is without Cause, as defined below, or if Executive
terminates employment with Labor Ready or the Company for Good Reason and no
Cause for termination exists, and if the targets and objectives are achieved,
Executive will be paid a prorated amount of the Executive and Transition Bonus
adjusted to reflect the number of days of Executive’s actual employment in such
fiscal year as compared to the number of days that Employee would have worked
in such fiscal year had Employee been employed through the end of the year.
Such payment would be made at the same times as if Executive had remained
employed through the year end.

 

3

 

5.                                       Executive’s position will be President and
CEO of the surviving corporation after the Merger.  In this position, he will be required to (a) devote
the necessary time, attention, skill and efforts to performance of his duties
as President and CEO, including (i) oversight of the business units under
Executive’s management; (ii) formulating a succession plan; (iii) identifying
and recruiting his successor; (iv) formulating a transition plan; and (b) perform
such other duties as may be assigned by the Board of Directors in its
discretion.  Executive’s performance of
his obligations under subsections (a) (ii), (iii) and (iv) shall
be in accordance with a process approved by the Board of Directors with the
input of Executive.

 

D.                                    Benefits.

 

1.                                       Executive shall be entitled to all benefits
offered generally to employees of the Company or such other entity that takes
over the operations of Resources from the Company

 

2.                                       Executive shall be entitled each year during
the term of this Agreement to a vacation accrual of twenty-five (25) business
days, no two of which need be consecutive, during which time his compensation
shall be paid in full.  Vacation benefits
shall be subject to the standard policy of the Company regarding vacation or
such other entity that takes over the operations of Resources from the Company.

 

II.                                     TERMS AND CONDITIONS.

 

A.                                    Employment At Will.

 

1.  The Company and Executive agree that
Executive’s employment is not for any specific or minimum term, and that
subject to Section II.A.2 of this Agreement, the continuation of Executive’s
employment is subject to the mutual consent of the Company and Executive, and
that it is terminable at will, meaning that either the Company or Executive may
terminate the employment at any time, for any reason or no reason, with or
without cause, notice, pre-termination warning or discipline, or other pre- or
post-termination procedures of any kind. 
Executive acknowledges and agrees that any prior representations to the
contrary are void and superseded by this Agreement.  Except as noted in Section VI.A, this
Agreement expressly supersedes the CLP Employment Agreement and Executive
agrees that Executive shall be entitled to no payments or other benefits under
such Agreement, including payments or benefits related to a sale of Holdings or
any of its subsidiaries as provided in the CLP Employment Agreement.  Executive and the Company agree that
Executive’s employment may be transferred upon the unilateral decision of the
Company to another entity within the Labor Ready Group at any time without
advance notice and that such transfer of employment shall not constitute “termination”
of employment for any purpose under this Agreement, including this Section II.A.  Executive may not rely on any future
representations to the contrary of this section II.A.1, whether written or
verbal, express or implied, by any statement, conduct, policy, handbook,
guideline or practice of Labor Ready or its employees or agents.  Nothing in this Agreement should be construed
as creating any right, contract or guarantee of employment.

 

4

 

2.                                       (a)                                  In the event of termination of Executive’s
employment for any reason, Executive shall be paid unpaid wages and unused
vacation earned through the termination date.

 

(b)                                 If the Company terminates Executive’s
employment without Cause or Executive terminates employment with Good Reason as
defined in this Agreement, in addition to the amounts described in Section II.A.2.a
Executive shall be provided with the following as the sole remedy for such
termination, subject to withholding:

 

(i)                                     separation payments for twelve (12) months
from the termination date at the base monthly salary in effect for Executive on
the termination date, or if such termination occurs during the first two (2) years
of Executive’s employment under this Agreement, the difference between the
number of full months of employment under this Agreement and 24 months, if such
difference is longer than twelve (12) months, with the actual period of receipt
of such payments being referred to as the “Severance Period”; and

 

(ii)                                  continued vesting for a period of twelve (12)
months past the Executive’s employment termination date of any previously
awarded Labor Ready stock options, restricted stock and other equity awards in
compliance with the terms of the relevant plan or plans, and any applicable
sub-plan or option agreement, provided that all vested awards shall be
exercised prior to the end of such twelve-month period.

 

(c)                                  To be entitled to the benefits set forth in Section II.A.2(b),
Executive must (i) sign and deliver and not revoke a release in the form
of Exhibit A to this Agreement in accordance with its terms; and (ii) be
in full compliance with all provisions of Section III and IV of this
Agreement.

 

3.                                       (a)                                  For
the purpose of this Agreement, “Cause,” as used herein, means any of the
following: (i) any material breach of this Agreement by Executive which,
if curable, has not been cured within twenty (20) days after Executive has been
given written notice of the need to cure such breach, or which breach, if
previously cured, recurs; (ii) unauthorized use or disclosure of
Confidential Information, as defined in this Agreement; (iii) Executive’s
substantial and repeated failure to perform duties as reasonably directed by
the Board of Directors of the Company; (iv) material failure of Executive
to comply with rules, policies or procedures of the Company as they may be
amended from time to time; (v) dishonesty, fraud or gross negligence
related to the business; (vi) personal conduct that is materially
detrimental to the business or that violates the letter or spirit of the
Company’s Code of Business Conduct and Ethics, in the good faith discretion of
the Board; or (vii) conviction of or plea of nolo contendere to a felony.

 

(b)                                 “Good
Reason,” as used herein, means (i) any material breach of this Agreement
by the Company which, if curable, has not been cured within 20 days after the Company has been
given written notice of the need to cure the breach, or which breach, if
previously cured, recurs; (ii) assignment of Executive, without Executive’s
consent, to a position that is not President and CEO of the entity controlling the
operations (as distinguished from administrative functions) formerly conducted
by Holdings;  (iii) if there is a
change in location of Executive’s primary place of work of more than 35 miles;
or (iv) the material reduction of

 

5

 

Executive’s
responsibilities and authority below the level of responsibility and authority
held by Labor Ready’s Regional Vice President of Operations.

 

B.                                    Arbitration.  The
Company and Executive agree that any claim arising out of or relating to this
Agreement, or the breach of this Agreement, or Executive’s application,
employment, or termination of employment, shall be submitted to and resolved by
binding arbitration under the Federal Arbitration Act.  The Company and Executive agree that all claims
shall be submitted to arbitration including, but not limited to, claims based
on any alleged violation of Title VII or any other federal or state laws;
claims of discrimination, harassment, retaliation, wrongful termination,
compensation due or violation of civil rights; or any claim based in tort,
contract, or equity.  Any arbitration
between the Company and Executive will be administered by the American
Arbitration Association under its Employment Arbitration Rules then in
effect.  The award entered by the
arbitrator will be based solely upon the law governing the claims and defenses
pleaded, and will be final and binding in all respects.  Judgment on the award may be entered in any
court having jurisdiction.  In any such
arbitration, neither Executive nor Company shall be entitled to join or
consolidate claims in arbitration or arbitrate any claim as a representative or
member of a class.  The Company agrees to
pay for the arbiter’s fees where required by law.  In any claim or jurisdiction where this agreement
to arbitrate is not enforced, the Company and Executive waive any right either
may have to bring or join a class action or representative action, and further
waive any right either may have under statute or common law to a jury trial.  The prevailing party in any arbitration shall
be entitled to its reasonable attorneys’ fees and costs.

 

C.                                    Duty of Loyalty. 
Executive agrees during working hours to devote his full and undivided
time, energy, knowledge, skill and ability to the Company’s business, to the
exclusions of all other business and sideline interests.  Executive also agrees not to be employed
elsewhere unless first authorized by the Company in writing, and the Company hereby
approves Executive’s current status as a member of the Board of Directors of
American Civil Constructors, provided that no conflict of interest exists at
any time during such membership.  In no event will Executive allow other
activities to interfere with Executive’s duties to the Company.  Executive agrees to faithfully and diligently
perform all duties to the best of Executive’s ability.  Executive recognizes that the services to be
rendered under this Agreement require certain training, skills and experience,
and that this Agreement is entered into for the purpose of obtaining such
service for the Company.  Executive
agrees to perform his duties in a careful, safe, loyal and prudent manner.  Executive agrees to conduct himself in a way
which will be a credit to Labor Ready’s reputation and interests.

 

D.                                    Reimbursement.  If
Executive ever possesses any Company funds (including without limitation cash
and travel advances, overpayments made to Executive by the Company, amounts
received by Executive due to the Company’s error, unpaid credit or phone
charges, excess sick or vacation pay, or any debt owed the Company for any
reason, including misuse or misappropriation of Company assets), Executive will
remit them to Labor Ready corporate headquarters in Tacoma, Washington promptly
unless directed otherwise in writing.  If
Executive’s employment ends, Executive will fully and accurately account to the
Company for any Company funds and other property in Executive’s
possession.  If Executive fails to do so,
Executive hereby authorizes the Company (subject to any limitations under applicable
law) to

 

6

 

make
appropriate deductions for amounts agreed to be due and owing from any payment
otherwise due Executive (including without limitation, Executive’s paycheck,
salary, bonus, commissions, expense reimbursements and benefits), in addition
to all other remedies available to the Company.

 

E.                                      Background Investigation. 
Executive agrees that at any time during employment the Company may,
subject to any applicable legal requirements and reasonable grounds,
investigate Executive’s background for any relevant information on any subject
which might have a bearing on job performance including, but not limited to,
employment history, education, financial integrity and credit worthiness, and
confirm that Executive has no criminal record during the last ten years.  Executive shall sign any and all documents
necessary for the Company to conduct such investigation.  For this purpose, Executive specifically
authorizes the Company to obtain any credit reports, background checks and
other information which may be useful. 
Executive acknowledges and, except as may be limited by applicable law,
agrees to abide at all times by the terms of Labor Ready’s drug and alcohol policy.  Executive understands that failure to comply
with Labor Ready’s policies, including its drug and alcohol policies may
result in termination of employment.  Labor Ready and Executive acknowledge that in his role
as CEO, Executive’s job duties may involve entertainment of customers and potential
customers in the course of his regular responsibilities. Such entertainment may
include drinking of alcohol during meals or other entertainment events,
providing customers with alcohol as seasonal gifts, or otherwise possessing and
consuming alcohol in moderation. So long as Executive does not drink to the
point of inebriation, violate any motor vehicle laws relating to alcohol, or drink
to the point of otherwise causing embarrassment to Labor Ready, Labor Ready
agrees that such activities identified in this paragraph will not constitute a
violation of the Labor Ready policies on alcohol consumption.

 

III.                                 NON-COMPETITION
AND NON-SOLICITATION.

 

A.                                    Non-Disclosure of Confidential
Information.

 

1.                                       In connection with Executive’s duties,
Executive may have access to some or all of the Labor Ready Group’s “Confidential
Information,” (including information which was formerly the confidential
information of CLP prior to the closing of the Merger) which includes the
following, whether recorded or mentally memorized: (i) the ideas, methods,
techniques, formats, specifications, procedures, designs, strategies, systems,
processes, data and software products which are unique to the Labor Ready
Group; (ii) all of the Labor Ready Group’s customers, marketing, pricing and
financial information, including the names, addresses and any other information
concerning any customer; (iii) the content of all of the Labor Ready Group’s
operations, sales and training manuals; (iv) all other information now in
existence or later developed which is similar to the foregoing; and (v) all
information which is marked as confidential or explained to be confidential or
which, by its nature, is confidential.

 

2.                                       Executive recognizes the importance of
protecting the confidentiality and secrecy of Confidential Information.  Executive agrees to use his best efforts to
protect Confidential Information from unauthorized disclosure to others.  Executive understands that protecting
Confidential Information from unauthorized disclosure is critically important
to the Labor Ready

 

7

 

Group’s
success and competitive advantage, and that the unauthorized disclosure of
Confidential Information would greatly damage the Labor Ready Group.  Executive recognizes and agrees that taking
and using a trade secret or Confidential Information by memory is no different
from taking it on paper or in some other tangible form.  Executive agrees that Executive will request
clarification from Labor Ready’s legal department if Executive is at all
uncertain as to whether any information or materials are “Confidential
Information.”

 

3.                                       Executive agrees not to disclose any
Confidential Information to others outside the Company or others inside the
Company without a need to know such information, use any Confidential
Information for Executive’s own benefit or make copies of any Confidential
Information without Labor Ready’s written consent, whether during or after
Executive’s employment with the Company. 
Executive recognizes and agrees that he has the duty of care of a
fiduciary in protecting the Labor Ready Group’s Confidential Information.  Executive also agrees to return all
Confidential Information in his possession to Labor Ready at Labor Ready’s
headquarters in Tacoma, Washington, immediately upon Labor Ready’s request.

 

4.                                       If Executive’s employment with any member of
the Labor Ready Group is terminated, Executive agrees to immediately return to
Labor Ready, at its headquarters in Tacoma Washington, all manuals, mailing
lists, customer lists, supplies, equipment, checks, petty cash, and all other
material and records of any kind concerning the Labor Ready Group’s business,
that Executive may possess, unless otherwise approved by Labor Ready.

 

B.                                    Non-Competition.

 

1.                                       During the term of this Agreement and for a
period of two (2) years immediately following the termination of
employment with any member of the Labor Ready Group with or without Cause or
Good Reason, so long as Labor Ready continues to carry on substantially the
same business, defined in this Agreement as Skilled Construction and Industrial
Trades Staffing, Day Labor and Light Industrial Staffing, Executive will not,
for any reason whatsoever, directly or indirectly, for Executive or on behalf
of, or in conjunction with, any other person(s), company, partnership,
corporation or business entity, engage in any of the following activities
within the “Restricted Area” (as hereinafter defined):  own, manage, operate, control, be employed
by, participate in, invest in, engage in or be connected in any manner with the
ownership, management, operation or control of the same, similar, or related
line of business as that carried on at the time of termination by any member of
the Labor Ready Group (including the surviving corporation after the Merger),
including, without limitation, the solicitation of business or customers
located within the Restricted Area.  For
this purpose, the term “Restricted Area” means a twenty-five (25) mile radius
around each branch of any member of the Labor Ready Group at the time of
termination and any location where any member of the Labor Ready Group has
placed workers during Executive’s employment. 
This non-competition agreement is enforceable whether Executive’s
employment is terminated by any member of the Labor Ready Group or
Executive.  This non-competition
agreement does not prevent Executive from involvement in any industries in
which the Labor Ready Group is not involved, such as health care, IT, legal, accounting
or executive placement, unless any member of the Labor Ready Group has entered
into those fields prior to Executive’s termination.

 

8

 

2.                                       Executive agrees that this covenant is
necessary to protect the intellectual property and trade secrets of the Labor
Ready Group in view of Executive’s key role with the Labor Ready Group  and the extent of confidential and
proprietary information about the Labor Ready Group to which Executive has
information.  The Company and Executive
agree that the provisions of this Section III.B do not impose an undue
hardship on Executive and are not injurious to the public; that this provision
is necessary to protect the business of the Labor Ready Group; that the nature
of Executive’s responsibilities with the Company under this Agreement and Executive’s former
responsibilities with CLP provide and/or have provided Executive with access to
Confidential Information that is valuable and confidential to the Labor Ready
Group; that the Company would not continue to employ Executive if Executive did
not agree to the provisions of this Section III.B; that this Section III.B
is reasonable in terms of length of time and geographic scope; and that
sufficient consideration supports this Section III.B.  In the event that a court or arbitrator
determines that any provision of this Section III.B is unreasonably broad
or extensive, including length of time or geographic scope, Executive agrees
that such court or arbitrator should narrow such provision to the extent
necessary to make it reasonable and enforce the provision as narrowed.

 

C.                                    No Employee Solicitation. 
During the term of this Agreement and for a period of two (2) years
immediately following the termination of employment, with or without Cause or
Good Reason, so long as  Labor Ready
continues to carry on substantially the same business, Executive will not, for
any reason whatsoever, directly or indirectly, for Executive or on behalf of,
or in conjunction with, any other person(s), company, partnership, corporation
or business entity, solicit, induce or otherwise influence, or attempt to
solicit, induce or otherwise influence, in any manner any of the Labor Ready
Group’s employees to leave their employment with the Labor Ready Group for any
reason, including for the purpose of becoming employed by Executive’s new
employer.

 

D.                                    No Customer Solicitation. 
Executive understands and agrees that the methods employed in the Labor
Ready Group’s business will place Executive in a close business and personal
relationship with Labor Ready Group customers. 
Thus, during the term of this Agreement and for a period of two (2) years
immediately following the termination of employment with or without Cause or
Good Reason, so long as the Labor Ready Group continues to carry on
substantially the same business, Executive will not, for any reason whatsoever,
directly or indirectly, for Executive or on behalf of, or in conjunction with,
any other person(s), company, partnership, corporation or business entity,
contact, call upon, solicit, service, influence or attempt to contact, call
upon, solicit, service or influence any customers or potential customers
(prospects) of any branch where Executive was stationed within one (1) year
before termination of employment with any member of the Labor Ready Group, or
with whom Executive had direct or indirect contact or for whom Executive had
responsibility during Executive’s tenure with any member of the Labor Ready
Group or otherwise assisted the Labor Ready Group in providing services to.

 

9

 

E.                                      General Provisions.

 

1.                                       If Executive violates any of the covenants in
this Section III, the time period covered by the covenants will
automatically be extended by a length of time equal to the time period during
which such violation occurred.

 

2.                                       The covenants set forth above are independent
of any other provision of this Agreement. 
Executive agrees that they will be enforceable whether or not Executive
has any claim against the Company.

 

3.                                       Executive acknowledges that if Executive
violates any of the foregoing covenants, the damage to the Company will be such
that the Company is not likely to be made whole with a monetary award.  Therefore, Executive agrees that if Executive
violates any such covenant, the Company will be entitled to a temporary
restraining order, a preliminary injunction and/or a permanent injunction, in
addition to any and all other legal or equitable remedies available under law
and equity.

 

4.                                       Executive represents and warrants that
Executive has been in full compliance with the provisions protecting Company’s
Confidential Information as set forth in the CLP Employment Agreement.

 

5.                                       For the purposes of this Section III,
all references to Confidential Information or Confidential Information of the
Labor Ready Group also apply to Confidential Information belonging to any
affiliate of the Labor Ready Group. 
Executive’s covenants in subsections (B), (C) and (D) of this Section III
shall protect affiliates of the Labor Ready Group to the same extent that they
protect any member of the Labor Ready Group, to the extent that he has
Confidential Information belonging to such affiliates.

 

F.                                      Other Employers and Obligations.

 

1.                                       Executive represents to the Company that
Executive is not subject to any restriction or duties under any agreement with
any third party or otherwise which will be breached by employment with the
Company or any member of the Labor Ready Group, or which will conflict with the
best interests of any member of the Labor Ready Group or Executive’s
obligations under this Agreement.

 

2.                                       Executive warrants that his employment with
the Company will not violate any contractual obligations with other
parties.  Executive will not use during
his employment with the Company nor disclose to any member of the Labor Ready
Group any confidential or proprietary information or trade secrets from any
former or current employers, principals, partners, co-venturers, customers or
suppliers, and will not bring onto the premises of any member of the Labor
Ready Group any unpublished document or any property belonging to any such
person or entities without their consent.   
If employment with any member of the Labor Ready Group is terminated,
Executive agrees to tell his new employer about this Agreement and its terms at
the time of re-employment.

 

10

 

IV.                                ASSIGNMENT OF INVENTIONS.

 

A.                                    Assignment. 
Executive will make prompt and full disclosure to the Company, will hold
in trust for the sole benefit of the Company, and will assign exclusively to
the Company all right, title and interest in and to any and all inventions,
discoveries, designs, developments, improvements, copyrightable material and
trade secrets (collectively herein “Inventions”) that Executive solely or jointly
may conceive, develop, author, reduce to practice or otherwise produce during
his employment with any member of the Labor Ready Group.

 

B.                                    Outside Inventions. 
Executive’s obligation to assign shall not apply to any Invention about
which Executive can prove all the following: 
(a) it was developed entirely on Executive’s own time; (b) no
equipment, supplies, facility, services or trade secret information of any
member of the Labor Ready Group was used in its development; (c) it does
not relate (i) directly to the business of any member of the Labor Ready
Group or (ii) to the actual or demonstrably anticipated business, research
or development of any member of the Labor Ready Group; and (d) it does not
result from any work performed by Executive for the Labor Ready Group.  Executive shall attach a list of all existing
Inventions meeting these requirements to this Agreement.

 

V.                                    COMPLIANCE WITH LAWS AND CODE OF
CONDUCT.

 

A.                                    Commitment to Compliance.  The
Company is committed to providing equal employment opportunity for all persons
regardless of race, color, gender, creed, religion, age, marital or family
status, national origin, citizenship, mental or physical disabilities, veteran
status, ancestry, citizenship, HIV or AIDS, sexual orientation, on-the-job-injuries,
or the assertion of any other legally enforceable rights.  Equal opportunity extends to all aspects of
the employment relationship, including hiring, transfers, promotions, training,
termination, working conditions, compensation, benefits, and other terms and
conditions of employment.  The Company is
likewise committed to ensuring that employees are accurately paid for all hours
worked.

 

B.                                    Duty to Comply with the Law. 
Executive agrees to comply with all federal, state and local laws and
regulations, including equal employment opportunity laws and wage and hour
laws.  Executive agrees to immediately
notify the Chairman of the Board of the Company or his or her designee if
Executive becomes aware of a violation of the law, or suspects a violation of
the law has or will occur.  Executive
acknowledges that Executive may be held personally liable for intentional
violations.

 

C.                                    Duty to Comply with Labor Ready’s
Code of Business Conduct and Ethics.  Executive acknowledges and
agrees that it is his duty to be familiar with Labor Ready’s Code of Business
Conduct and Ethics, and to comply with all of its provisions.

 

VI.                                MISCELLANEOUS.

 

A.                                    Integration.  No
promises or other communications made by either the Company or Executive are
intended to be binding unless they are set forth in this Agreement.  This

 

11

 

Agreement contains the
entire agreement between the parties and replaces and supersedes any prior
agreements, including the CLP Employment Agreement, except that all of
Executive’s obligations pertaining to the protection of CLP confidential
information and intellectual property as addressed in the CLP Employment
Agreement remain in full force and effect in addition to whatever obligations
Executive has under this Agreement. 
Executive represents and agrees that other than as set forth under the
Merger Agreement, he is not entitled to any CLP stock options or equity based
grants of any type and no other agreements or arrangements exist to the
contrary.  Upon closing of the Merger,
this Agreement will supersede any employment agreement between Executive and
CLP.  This Agreement may not be modified except by an instrument signed by
the Chairman of the Board of the Company or of such other entity that takes
over the operations of Resources from the Company.  This Agreement will be binding upon Executive’s
heirs, executors, administrators and other legal representatives.

 

B.                                    Choice of Law.  The
Company and Executive agree that this Agreement and all interpretations of the
provisions of this Agreement will be governed by the laws of the State of
Washington, without regard to choice of law principles.

 

C.                                    No Waiver.  If
either party waives any condition or term of this Agreement, it is not waiving
any other condition or term, nor is it waiving any rights with respect to any
future violation of the same condition or term. 
If either party chooses to refrain from enforcing any condition or term,
the Company does not intend to waive the right to do so.  Sections II(B), II(E), III and
IV of this Agreement are to remain in effect after termination of the remainder
of this Agreement.

 

D.                                    Severability.  The
provisions of this Agreement are intended to be severable from each other.  No provision will be invalid because another provision
is ruled invalid or unenforceable.  If
any provision in this Agreement is held to be unenforceable in any respect,
such unenforceability shall not affect any other provision of this Agreement
and shall be re-written to provide the maximum effect consistent with the
intent of the provision.

 

E.                                      Assignment.  The
Company reserves the right to assign this Agreement at any time to any member
of the Labor Ready Group or to any successor in interest to the Company’s
business without notifying Executive in advance, and Executive hereby expressly
consents to such assignment.  Immediately
upon completion of the Merger, this Agreement shall be an Agreement between
Executive and the surviving corporation after the Merger.  All terms and conditions of this Agreement
will remain in effect with regard to the employing entity to which Executive
has been transferred and/or to which this Agreement has been assigned.  The parties expressly understand and agree
that the Restrictive Covenants set forth at Sections III and IV shall remain in
effect and shall expressly apply in favor of the Labor Ready Group regardless
of any such transfer and/or assignment.

 

F.                                      Venue. 
Where the parties have mutually waived their right to arbitration in
writing or have not yet sought to enforce their right to compel arbitration,
venue for any legal action in connection with this Agreement will be limited
exclusively to the Washington State Superior Court for Pierce County, or the
United States District Court for the Western District of Washington at
Tacoma.  The prevailing party shall be
entitled to its reasonable attorneys’ fees

 

12

 

and
costs.  Executive agrees to submit to the
personal jurisdiction of the courts identified herein, and agrees to waive any
objection to personal jurisdiction in these courts.

 

	
  LABOR
  READY ACQUISITION SUB II,

  INC.

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Noel Wheeler

  	
   

  
	
  By:

  	
  /s/
  Steven Cooper

  	
   

  	
  Noel
  Wheeler

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Steven
  C. Cooper

  	
   

  	
  Date:

  	
    5/26/05

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  5/27/05

  	
   

  	
   

  
								

 

 

EXHIBIT A

 

RELEASE OF CLAIMS

 

This
Release of Claims (“Release”) is hereby executed by Noel Wheeler (“Executive”)
in accordance with the Employment Agreement between Executive and Labor Ready
Acquisition Sub II, Inc. (“Employer”), dated                         
(“Employment Agreement”).

 

RECITALS

 

A.                                   Employer and Executive are parties to the
Employment Agreement.

 

B.                                     The Employment Agreement provides for certain
payments and benefits to Executive upon termination of Executive’s employment under
certain circumstances, provided that Executive signs and delivers to Employer
upon such termination a Release in substantially the form of this Release.

 

C.                                     Executive desires for Employer to make
payments in accordance with the Employment Agreement and therefore executes
this Release.

 

TERMS

 

1.                                       Waiver, Release and Covenant.  On
behalf of Executive and Executive’s marital community, heirs, executors,
administrators and assigns, Executive expressly waives, releases, discharges
and acquits any and all claims against Employer and its present, former and
future affiliates, related entities, predecessors, successors and assigns, and
all of their present, former and future officers, directors, stockholders,
employees, agents, partners, and members, in their individual and
representative capacities (collectively “Released Parties”) that arise from or
relate to Executive’s employment with Employer and/or the termination of such
employment (“Released Claims”).  This
waiver and release includes any and all Released Claims (including claims to
attorneys’ fees), damages, causes of action or disputes, whether known or
unknown, based upon acts or omissions occurring or that could be alleged to
have occurred before the execution of this Release.  Released Claims include, without limitation,
claims for wages, employee benefits, and damages of any kind whatsoever arising
out of any:  contract, express or
implied; tort; discrimination; wrongful termination; any federal, state, local
or other governmental statute or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination
in Employment Act, as amended (“ADEA”); the Employee Retirement Income Security
Act of 1974; and any other legal limitation on the employment relationship.  Executive also covenants and promises never
to file, press or join in any complaint or lawsuit for personal relief or any
amounts of any nature based on any Released Claim and agrees that any such
claim, if filed by Executive, shall be dismissed, except that this covenant and
promise does not apply to any claim of Executive challenging the validity of
this Release in connection with claims arising under the ADEA and/or the Older
Workers’ Benefit Protection Act of 1990 (“OWBPA”).  Executive represents and warrants that he is
the sole owner of all Released Claims and has not assigned, transferred, or
otherwise disposed of Executive’s

 

A - 1

 

right
or interest in those matters. 
Notwithstanding the foregoing, this waiver and release does not apply to
claims that arise after the date that the release is executed, claims to vested
benefits under ERISA, workers’ compensation claims or any other claims that may
not be released under this Release in accordance with applicable law.

 

2.                                       Acknowledgment of Sufficiency of
Consideration.  Executive acknowledges and agrees that in the
absence of Executive’s execution of this Release, Employer is not obligated to
provide Executive with the payment and benefits described in Section II(A)(2)(b) of
the Employment Agreement, and that the payment and benefits set forth in Section II(A)(2)(b) of
the Employment Agreement are adequate consideration for the covenants and
release herein.

 

3.                                       Covenants and Obligations under Employment
Agreement.  Nothing in this Release supersedes or
restricts any obligations that Executive owes to Employer, including, without
limitation, the obligation to protect Employer’s interests in confidential
information and trade secrets and inventions under the Employment Agreement
and/or under applicable law.

 

4.                                       Review and Revocation Period. 
Executive has a period of seven (7) calendar days after delivering
the executed Release to Employer to revoke the Release.  To revoke, Executive must deliver a notice
revoking his agreement to this Release to the CEO of Employer.  This Release shall become effective on the
eighth day after delivery of this executed Release by Executive to Employer (“Effective
Date”), provided that Executive has not revoked the Release.  Employer shall have no obligation to provide
Executive with any payment or benefits as described in Section 6 of the
Employment Agreement if Executive revokes this Release.

 

5.                                       Governing Law.  This
Release shall be interpreted in accordance with the law of the State of
Washington, without regard to the conflicts of law provisions of such laws.

 

6.                                       Severability.  If
any provision of this Release constitutes a violation of any law or is or
becomes unenforceable or void, then such provision, to the extent only that it
is in violation of law, unenforceable or void, shall be deemed modified to the
extent necessary so that it is no longer in violation of law, unenforceable or
void, and such provision will be enforced to the fullest extent permitted by law.  If such modification is not possible, such
provision, to the extent that it is in violation of law, unenforceable or void,
shall be deemed severable from the remaining provisions of this Release, which
shall remain binding.

 

7.                                       Knowing and Voluntary Agreement. 
Executive hereby warrants and represents that (a) Executive has
carefully read this Release and finds that it is written in a manner that he
understands; (b) Executive knows the contents hereof; (c) Executive
has been advised to consult with his personal attorney regarding the Release
and its effects and has done so; (d) Executive understands that he is
giving up all Released Claims and all damages and disputes that have arisen
before the date of this Release, except as provided herein; (e) Executive
has had ample time to review and analyze this entire Release; (f) Executive
did not rely upon any representation or statement concerning the subject matter
of this Release, except as expressly stated in the Release; (g) Executive
has been given at least twenty-one (21) days to consider this Release and seven
(7) days to revoke this Release; (h) Executive understands the
Release’s final and binding effect; (i) Executive has signed this Release
as his free and voluntary act.

 

A - 2

 

8.                                      Arbitration and Venue. 
Employer and Executive agree that any claim arising out of or relating
to this Agreement, or the breach of this Agreement shall be submitted to and
resolved by binding arbitration under the Federal Arbitration Act.  Employer and Executive agree that all claims
shall be submitted to arbitration including, but not limited to, claims based
on any alleged violation of Title VII or any other federal or state laws;
claims of discrimination, harassment, retaliation, wrongful termination,
compensation due or violation of civil rights; or any claim based in tort,
contract, or equity.  Any arbitration
between Employer and Executive will be administered by the American Arbitration
Association under its Employment Arbitration Rules then in effect.  The award entered by the arbitrator will be
based solely upon the law governing the claims and defenses pleaded, and will
be final and binding in all respects.  Judgment
on the award may be entered in any court having jurisdiction.  In any such arbitration, neither  nor Employer shall be entitled to join or
consolidate claims in arbitration or arbitrate any claim as a representative or
member of a class.  Employer agrees to
pay for the arbiter’s fees where required by law.  In any claim or jurisdiction where this
agreement to arbitrate is not enforced, Employer and Executive waive any right
either may have to bring or join a class action or representative action, and
further waive any right either may have under statute or common law to a jury
trial. Where the parties have mutually waived their right to arbitration in
writing or have not yet sought to enforce their right to compel arbitration,
venue for any legal action in connection with this Agreement will be limited
exclusively to the Washington State Superior Court for Pierce County, or the
United States District Court for the Western District of Washington at
Tacoma.  Executive agrees to submit to
the personal jurisdiction of the courts identified herein, and agrees to waive
any objection to personal jurisdiction in these courts.  The prevailing party in arbitration shall be
entitled to its reasonable attorneys’ fees and costs.

 

EXECUTED
this         day of                             ,
20    .

 

	
   

  	
   

  
	
  Noel
  Wheeler

  

 

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