Document:

Exhibit
10.3.8.5

 

THIRD AMENDMENT

TO

EMPLOYMENT AGREEMENT

BY AND AMONG

WESTAFF SUPPORT, INC.,
WESTAFF, INC., AND DWIGHT S. PEDERSEN

 

The Employment Agreement
effective as of January 14, 2002, by and among Westaff Support, Inc. (the
“Company”), Westaff, Inc. (“Westaff”) and Dwight S. Pedersen (the “Executive”)
and amended effective June 30, 2003 and June 30, 2004, is hereby further
amended as follows, effective upon approval of the applicable resolution of the
Primary Committee of the Board of Westaff.

 

1.               Item 2 in Exhibit 1 to the Employment
Agreement (the definition of “Change of Control”) is deleted in its entirety
and replaced with the following:

 

“‘Change in
Control’ is defined as — a change in ownership or control of the Company’s
Parent, Westaff (USA), Inc., or Westaff effected through any of the following
transactions:

 

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

 

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

 

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

 

 

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

 

	
  EXECUTIVE:

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  WESTAFF SUPPORT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Dwight S. Pedersen

  	
   

  	
  /s/ W. Robert Stover

  	
   

  
	
  Dwight S. Pedersen

  	
  By:

  	
  W. Robert Stover

  
	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
  WESTAFF:

  
	
   

  	
  WESTAFF, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ W. Robert Stover

  	
   

  
	
   

  	
  By:

  	
  W. Robert Stover

  
	
   

  	
  Title:

  	
  Chairman of the BoardExhibit 10.1

 

NEIGHBORCARE,
INC.

 

2004 PERFORMANCE
INCENTIVE PLAN

 

RESTRICTED STOCK
AGREEMENT

 

RS No. [   ]

 

	
  Grantee: [Director]

  	
   

  	
  Date:  October 1, 2004

  

 

An Award of Restricted Stock is hereby awarded on the date set forth
above (the “Award Date”) by NeighborCare, Inc. (the “Corporation”), to the
Grantee, in accordance with the following terms and conditions, and the
conditions contained in the Corporation’s 2004 Performance Incentive Plan (the
“Plan”):

 

1.             Share Award.  The Corporation hereby awards
the Grantee  3,670 shares (the
“Shares”) of common stock, par value $0.02 per share (“Common Stock”), of the
Corporation pursuant to the Plan, as the same may from time to time be amended,
and upon the terms and conditions and subject to the restrictions therein and
hereinafter set forth.  A copy of the
Plan as currently in effect is available from the Corporation upon request and
is incorporated herein by reference.

 

2.             Restrictions on Transfer and Restricted Period.  Except
as set forth below, during the period (the “Restricted Period”) commencing on
the Award Date and terminating on the date the Grantee no longer serves as a
member of the Corporation’s Board of Directors, the Shares may not be sold,
assigned, exchanged, gifted, transferred, pledged, or otherwise encumbered by
the Grantee, except as hereinafter provided.

 

Except as set forth below, the Shares will
vest pursuant to the following schedule:

 

	
  Date of Vesting

  	
   

  	
  Amount of

  Award Vesting

  	
   

  	
  Number of

  Shares Vesting

  	
   

  
	
  Award Date

  	
   

  	
  100

  	
  %

  	
  3,670

  	
   

  

 

Notwithstanding the foregoing, if, during the
Restricted Period, the fair market value of the Shares is greater than $285,000
(based on the closing price of the Corporation’s common stock on the Nasdaq
Stock Market (or any successor listing or exchange) on the preceding trading
day), the restrictions set forth in this Section 2 shall be lifted with respect
to that number of the Shares which represents the amount of the fair market
value of the Shares in excess of $285,000, but the restrictions set forth in
this Section 2 shall continue to apply during the Restricted Period to that
portion of the Shares with a fair market value of $285,000.

 

Subject to the restrictions set forth in the
Plan, the Committee (as defined in the Plan) shall have the authority, in its
discretion, to accelerate the time at which any or all of the restrictions
shall lapse with respect to any Shares thereto, or to remove any or all of such
restriction, whenever the Committee may determine that such action is
appropriate by reason of 

 

 

changes in
applicable tax or other laws, or other changes in circumstances occurring after
the commencement of the Restricted Period.

 

3.             Certificates for the Shares.  The
Corporation shall issue a certificate (or certificates) or establish an
uncertificated account in the name of the Grantee with respect to the
Shares.  Such certificate (or
certificates) shall bear the following restricted legend (the “Restricted
Legend”):

 

The transferability of this certificate and the Shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 2004 Performance Incentive Plan of NeighborCare,
Inc.  Copies of such Plan are on file in
the office of the Secretary of NeighborCare, Inc.

 

The Grantee further agrees that simultaneously
with the execution of the Agreement, the Grantee shall execute stock powers in
favor of the Corporation with respect to the Shares and that the Grantee shall
promptly deliver such stock powers to the Corporation.

 

The following two paragraphs shall be
applicable if, on the Award Date, the Common Stock subject to such Award has
not been registered under the Securities Act of 1933, as amended, and under
applicable state securities laws, and shall continue to be applicable for so
long as such registration has not occurred:

 

The Grantee hereby agrees, warrants and
represents that Grantee is acquiring the Common Stock to be issued pursuant to
this Agreement for Grantee’s own account for investment purposes only, and not
with a view to, or in connection with, any resale or other distribution of any
of such shares, except as hereafter permitted. 
The Grantee further agrees that Grantee will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Corporation to the effect that
the proposed transaction will be exempt from such registration.  The Grantee shall execute such instruments,
representations, acknowledgments and agreements as the Corporation may, in its
sole discretion, deem advisable to avoid any violation of federal, state, local
or securities exchange rule, regulation or law.

 

The certificates for Common Stock to be
issued pursuant to this Agreement shall bear the following securities legend
(the “Securities Legend”):

 

The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under applicable state
securities laws.  The shares have been
acquired for investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Corporation that the proposed
transaction will be exempt from such registration.

 

2

 

The Securities
Legend shall be removed upon registration of the legended shares under the
Securities Act of 1933, as amended, and under any applicable state laws or upon
receipt of any opinion of counsel acceptable to the Corporation that said
registration is no longer required.

 

The sole purpose of the agreements,
warranties, representations and legend set forth in the two immediately
preceding paragraphs is to prevent violations of the Securities Act of 1933, as
amended, and any applicable state securities laws.

 

4.             Grantee’s Rights.  Except as otherwise provided
herein, the Grantee, as owner of the Shares, shall have all rights of a
stockholder.  During any Restricted
Period, the Grantee shall be entitled to vote such Shares in Grantee’s sole
discretion, at any annual or special meetings of the stockholders of the
Corporation and at any continuations or adjournments of such meetings, upon any
matters coming before such meetings or adjournments.

 

5.             Cash Dividends.  Cash dividends, if any, paid on
the Shares shall be to paid to Grantee on the date of payment for any such cash
dividend to the Corporation’s shareholders, as determined by the Corporation’s
Board of Directors.

 

6.             Expiration of Restricted Period.  Upon the
lapse or expiration of the Restricted Period, the Corporation shall deliver to
the Grantee (or in the case of a deceased Grantee, to Grantee’s legal
representative) the certificate in respect of such Shares and the related stock
powers held by the Corporation pursuant to Section 3 above.  The Shares as to which the Restricted Period
shall have lapsed or expired shall be free of the restrictions referred to in
Section 2 above and such certificate shall not bear the Restricted Legend
provided for in Section 3 above.  Notwithstanding
the foregoing, the Securities Legend described in Section 3 shall continue to
be included on the certificates as long as registration has not occurred.

 

7.             Adjustments for Changes in Capitalization of the
Corporation.  In the event of any change in the
outstanding shares of Common Stock by reason of any reorganization,
recapitalization, stock split, stock dividend, combination or exchange of
shares, merger, consolidation, or any change in the corporate structure of the
Corporation or in the shares of Common Stock, the number and class of Shares
covered by this Agreement shall be appropriately adjusted by the Committee in
the same manner as other outstanding shares are adjusted.   Any shares of Common Stock or other
securities received, as a result of the foregoing, by the Grantee with respect
to Shares subject to the restrictions contained in Section 2 above also shall
be subject to such restrictions and the certificate or other instruments
representing or evidencing such shares or securities shall be legended and
deposited with the Corporation in the manner provided in Section 3 above.

 

8.             Change in Control.  Upon a
“Change in Control” (as defined in the Plan) (and regardless of whether or not
Grantee undergoes a “Qualified Status Change” (as defined in the Plan”)), the
Shares shall be free of the restrictions contained in Section 2 above.

 

9.             Plan and Plan Interpretations as Controlling.  The
Shares hereby awarded and the terms and conditions herein set forth are subject
in all respects to the terms and conditions of the Plan, which are
controlling.  All determinations and
interpretations by the Committee shall be 

 

3

 

binding and conclusive upon the
Grantee or Grantee’s legal representatives with regard to any question arising
hereunder or under the Plan.

 

10.           Withholding and Social Security Taxes.  Upon the
termination of any Restricted Period with respect to any Shares (or any such
earlier time, if any, that an election is made under Section 83(b) of the Code,
or any successor provision thereto, to include the value of such Shares in
taxable income), the Corporation shall have the right to withhold from the
Grantee’s compensation an amount sufficient to fulfill its or its Affiliate’s
obligations for any applicable withholding and employment taxes.  Alternatively, the Corporation may require
the Grantee to pay the Corporation the amount of any taxes which the
Corporation is required to withhold with respect to the Shares, or, in lieu
thereof, to retain or sell without notice a sufficient number of Shares to
cover the amount required to be withheld. 
The Corporation shall withhold from any cash dividends paid on the
Restricted Stock an amount sufficient to cover taxes owed as a result of the
dividend payment.  The Corporation’s
method of satisfying its withholding obligations shall be solely in the
discretion of the Corporation, subject to applicable federal, state and local
laws.

 

11.           Tax Consequences.  Grantee has reviewed with
Grantee’s own tax advisors the Federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement.  Grantee is relying solely on
such advisors and not on any statements or representations of Corporation or
any of its agents.  Grantee understands
that Grantee (and not Corporation) shall be responsible for Grantee’s own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.  Grantee
understands that Section 83 of the Internal Revenue Code of 1986, as amended (the
“Code”), taxes (as ordinary income) the fair market value of the Shares as of
the date any “restrictions” on the Shares lapse.  To the extent that a grant hereunder is not otherwise an exempt
transaction for purposes of Section 16(b) of the Securities and Exchange Act of
1934 (the “1934 Act”), with respect to officers, directors and 10%
shareholders, a “restriction” on the Shares includes for these purposes the
period after the grant of the Shares during which such officers, directors and
10% shareholders could be subject to suit under Section 16(b) of the 1934
Act.  Alternatively, Grantee understands
that Grantee may elect to be taxed at the time the Shares are granted rather
than when the restrictions on the Shares lapse, or the Section 16(b) period expires,
by filing an election under Section 83(b) of the Code with the I.R.S. within 30
days from the date of grant.

 

GRANTEE ACKNOWLEDGES THAT IT IS GRANTEE’S
SOLE RESPONSIBILITY AND NOT THE CORPORATION’S TO FILE TIMELY THE ELECTION
AVAILABLE TO GRANTEE UNDER SECTION 83(b) OF THE CODE, EVEN IF GRANTEE REQUESTS
THAT THE CORPORATION OR ITS REPRESENTATIVES MAKE THIS FILING ON GRANTEE’S
BEHALF.

 

12.           Amendment/Choice of Law.  This
Agreement constitutes the entire understanding between the Corporation and the
Grantee with respect to the subject matter hereof and no amendment, supplement
or waiver of this Agreement, in whole or in part, shall be binding upon the
Corporation unless in writing and signed by the appropriate officer of the
Corporation, as designated by the Committee. 
This Agreement and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania.

 

4

 

13.           Grantee Acceptance.  The
Grantee shall signify Grantee’s acceptance of the terms and conditions of this
Agreement by signing in the space provided below and returning a signed copy of
this Agreement to the Corporation.  IF A
FULLY EXECUTED COPY HEREOF HAVE NOT BEEN RECEIVED BY THE CORPORATION, THIS
AWARD SHALL BE NULL AND VOID IN ITS ENTIRETY AND THE CORPORATION SHALL HAVE NO
OBLIGATIONS UNDER THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties hereto have
caused this RESTRICTED STOCK AGREEMENT to be executed as of the date first above
written.

 

	
   

  	
  NEIGHBORCARE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCEPTED:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City, State & Zip Code)

  
						

 

5

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