Document:

Exhibit 10.2

 

 

	
   

  	
   

  	
   

  	
   

  	
  HUMAN
  RESOURCES

  RECEIVED

   

  OCT 04
  2004

  

 

 

KEY
EMPLOYEE

TRANSITION
COMPENSATION PLAN 

AND SUMMARY PLAN DESCRIPTION

Effective
June 2, 2003 

(Amended September 20, 2004)

 

 

KEY
EMPLOYEE

TRANSITION
COMPENSATION PLAN 

AND SUMMARY PLAN DESCRIPTION

 

Introduction

 

Westaff
(USA), Inc. and its wholly-owned subsidiary, Westaff Support, Inc.
(the “Company”), have established the Westaff® Key Employee Transition
Compensation Plan (the “KETC Plan”) to provide transition compensation to
select regular employees whose positions have been eliminated. This document
constitutes both the formal plan document and the summary plan description of
the KETC Plan.

 

Eligible Employees

 

“Eligible
Employees” are active regular employees (or regular employees on an approved
leave of absence of no more than six (6) months in the twelve (12) month
period prior to the time of position elimination) who:

 

(a)          have been designated as a “key employee”  by senior management of the Company;

 

(b)         are participants in the Salary
Reduction Initiative of June 2003 effective the pay period
beginning June 30, 2003;

 

(c)          are not dismissed for “Cause” or “Performance-related Issues” as
further explained below; and

 

(d)         have not voluntarily terminated employment (quit) prior to the elimination
of their position.

 

Such
employees become eligible for transition compensation under the KETC Plan for (a) up
to one year following a “Change in Control” as defined below, or (b) in
the event of job elimination when they have not been offered a “Comparable
Position.” A Comparable Position is defined as follows:

 

•                  A
position similar in responsibility, skill requirements and work schedule as
the employee’s current position; and

 

•                  A
position for which the salary offered would require no more than a 10%
reduction in the employee’s then current pay; and

 

•                  A
position that does not require the employee to travel more than 30 miles from
his or her current primary place of work.

 

1

 

Change in Control

 

A
“Change in Control” means:

 

•                  The
sale, lease or disposition of substantially all of the assets of the Company
(directly or indirectly) and its parent, Westaff, Inc. (“the Parent”);

 

•                  Any
consolidation or merger of the Company and the Parent with or into any other
corporation or other entity or person, or any other corporate reorganization,
in which the stockholders of the Company and the Parent immediately prior to
such consolidation, merger or reorganization, own less than 50% of the Company’s
and the Parent’s voting power immediately after such consolidation, merger or reorganization;
or

 

•                  A
change in ownership or control of the Company or the Parent 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 or the Parent’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 the Parent or of a subsidiary and (ii) a
corporation owned directly or indirectly by the stockholders of the Parent in
substantially the same proportions as their ownership of the common stock of
the Parent;

 

(ii)                                  or a change in the composition of the Board of
the Parent 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.

 

2

 

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 Parent’s securities immediately before such transaction.

 

Termination for Cause or for Performance-related
Issues

 

A
Termination for “Cause” or for “Performance-related Issues” means the employee:

 

•                  acts in bad faith, or in breach of trust, to
the detriment of the Company;

 

•                  intentionally refuses or fails to act in a
way that constitutes a material violation of Company policy;

 

•                  exhibits, in regard to his/her employment,
unfitness or unavailability for service, unsatisfactory performance of the duties
required of their employment, provided that the Company has given him/her
written notice of the unsatisfactory performance and the action required by the
employee to make such performance satisfactory, and the employee has not
improved his/her performance to a satisfactory level;

 

•                  exhibits habitual or willful misconduct in
the performance of his/her duties;

 

•                  is convicted of a crime involving dishonesty;
or

 

•                  materially breaches his/her Employment
Contract

 

Benefits

 

Each
Eligible Employee who is entitled to benefits under the KETC Plan shall receive
transition compensation in the form of a single lump sum cash payment
equivalent to 26 weeks of his or her then current pay less appropriate
withholdings. “Current pay” means the employee’s base salary rate in effect on
the date the employee’s position is eliminated. This payment is in addition to
other compensation which may be provided by the Company’s current
Transition Compensation Plan (TCP) in effect at that time, or specific
provisions of the employee’s Employment Contract related to severance pay.

 

Entitlement to Benefits

 

The
KETC Plan’s benefits will be provided only to an Eligible Employee who signs
and returns a Release as described below. Benefits are paid when

 

3

 

employment
is terminated and the Release is irrevocable, except as otherwise provided by
Older Worker Protection Act’s revocation clause.

 

Release

 

To
receive transition compensation under the KETC Plan, an Eligible Employee must
sign a Release in the form and within the time established by the Company.

 

Withholding for Taxes

 

Notwithstanding
any other provision of the KETC Plan, all transition compensation shall be
reduced by applicable federal, state, or local tax withholding.

 

No Other Similar Compensation and Right of Setoff

 

Other
than pursuant to the terms of the KETC Plan, the Company’s separation pay in
lieu of notice policy, and any specific provisions of the employee’s Employment
Contract, the Company has no prior or other obligation, whether by express or
implied contract or otherwise, to provide any transition or other severance
benefit to employees who are discharged by the Company other than in
accordance with the Transition Compensation Plan (TCP.)

 

Any
payment made under the KETC Plan is a voluntary payment made by the Company,
which payment employees are not entitled to receive except according to the
terms of the KETC Plan. In the event that the Company is or becomes obligated
to provide payment under any other plan or by reason of any applicable law,
settlement or decision, the amount of any payment made to an employee under the
KETC Plan shall be set off against the amount that the Company is liable to pay
that employee, if any, under such other plan, law, settlement or decision.

 

Source of Benefits

 

The
benefits provided under the KETC Plan shall be unfunded and payable solely from
the general assets of the Company.

 

Expenses

 

The
expenses of operating and administering the KETC Plan shall be borne entirely
by the Company.

 

4

 

KETC Plan Sponsor and Administrator

 

The
Company shall be the “KETC Plan Sponsor” and the “Administrator” of the KETC
Plan, as such terms are defined in the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”). The Administrator shall make any and all
determinations required to be made in connection with the operations and
administration of the KETC Plan, including (without limitation) the determination
of whether an employee is an eligible employee and the amount of any benefit
payable hereunder. The Administrator shall have the discretionary power to
interpret the provisions of the KETC Plan as it may determine is necessary
or appropriate for the operations and administration of the KETC Plan.

 

Named Fiduciary

 

The
Company is the “named fiduciary” of the KETC Plan within the meaning of ERISA,
including the “named fiduciary” with the power to act with respect to the
review of claims for compensation under the KETC Plan that are denied.

 

Allocation and Delegation of Responsibilities

 

The
Company may allocate any of its responsibilities for the operation and
administration of the KETC Plan to any officer or employee of the Company. It may also
delegate any of its responsibilities under the KETC Plan by designating, in
writing, another person to carry out such responsibilities. Any person so
designated shall then be responsible for carrying out the responsibilities
described in such writing.

 

No Individual Liability

 

It
is the express purpose and intention of the Company that no individual
liability whatsoever shall attach to, or be incurred by, any director, officer,
employee, representative or agent of the Company under, or by reason of the
operation of, the KETC Plan.

 

No Amendment or Termination of the KETC Plan

 

The
Company affirms that this June 2, 2003 KETC Plan will remain in full force
and effect with regard to the Eligible Employees and will continue for up to
one year after a Change in Control during which time it will not be subject to
amendment or termination with regard to the Eligible Employees unless both the
Company and the Eligible Employee agree in writing.

 

5

 

Claims and Review Procedures

 

Any
employee who believes that the employee has not received the proper
compensation under the KETC Plan must file a written claim with the
Administrator. The Administrator will review the claim and notify the employee
of its decision in writing within 60 days after the claim is received.

 

If
the Administrator denies a claim, in whole or in part, the Administrator’s
notice will set forth:

 

1.                    The specific reason(s) for denial;

 

2.                    The KETC Plan provision(s) on which the
denial is based;

 

3.                    A description of any material or information necessary
for the claimant to perfect the claim, 
and an explanation of any such material or information is necessary and;

 

4.                    Information concerning the steps to be taken
if the claimant wishes to submit the claim for further review.

 

If
the claimant feels the denial of the claim is improper, the claimant, or the
claimant’s duly authorized representative, must file a written request for a
full review of the claim. A request for review must be filed with the
Administrator within 90 days after the claimant receives the notice of denial
and should set forth all of the grounds upon which it is based, all facts in
support of the request and any other matters the claimant (or the claimant’s
representative) deems pertinent. The Administrator will furnish the claimant
with a final written decision within 60 days after receipt of the request for
review.

 

Questions Regarding the KETC Plan

 

An
employee having questions regarding the KETC Plan or its application should
direct them to the Company’s Human Resources Department.

 

6

 

TO EVIDENCE THE ADOPTION OF THE WESTAFF® KEY EMPLOYEE TRANSITION COMPENSATION PLAN effective
as of June 2, 2003 and amended as of September 20, 2004 this document
has been executed by an authorized officer of the Company.

 

	
   

  	
  Westaff (USA), Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:
  September 20, 2004

  	
  By:

  	
  /s/
  Dwight S. Pedersen

  	
   

  
	
   

  	
   

  	
  Dwight
  S. Pedersen

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  

 

By signing below, the employee acknowledges receipt and
agreement to the terms of the June 2, 2003 Key Employee Transition
Compensation Plan and amended September 20, 2004:

 

 

	
  By:

  	
    /s/ John P.
  Sanders

  	
   

  	
  Date:

  	
    9/27/04

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    John
  Sanders

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    VP.
  INTERNAL AUDIT

  	
   

  	
   

  

 

 

Note: A copy of this signed document is to be maintained in
the employee’s personnel file.

 

7EXHIBIT 10.3

 

	
  

  	
   

  	
  Employment Contract

  

 

Electronic Form Template 1/06 (emp_con.dot)

 

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

 

Westaff
hereby agrees to hire you or continue your employment and you agree to accept
employment or continue your employment with Westaff upon the following terms
and conditions:

 

1. Duration. Your employment shall start or continue as of 3/20/06 and shall
continue thereafter until terminated by either party giving to the other two
weeks’ advance notice of termination. However, Westaff is not obliged to give
you such advance notice if:

 

a.               Termination occurs during the first year of
your employment; or

b.              You are a part-time employee; or

c.               You accept an offer of employment with a
business competitive to Westaff; or

d.              You are terminated for misconduct, violation
of this Contract or violation of Westaff’s policies

or rules as set forth in Westaff’s Employee Handbook or otherwise made
known to you.

 

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

 

3. Pay. You will be paid a beginning salary of $140,000
per year or a wage of $— per hour. Your pay may be revised without
impairing the effectiveness of any other provisions of this Contract. Your pay
will be paid in equal installments every two weeks. Each pay period is distinct
and severable, and your employment for part of a pay period or part of
a year will not entitle you to pay for more than the time you actually worked.
In the event your employment terminates during a pay period, your pay will be
prorated to the date of termination, and will include earned vacation pay, if
any.

 

4. Confidentiality. Westaff is a provider of temporary staffing and employment services.
You acknowledge that by virtue of your employment, you will become familiar
with or have access to Westaff’s valuable proprietary information, confidential
data and trade secrets which include but are not limited to, customers’ and
employees’ names, addresses and telephone numbers, bill and pay rates, employees’
pay and skills, other statistical information, sales techniques, methods of
operation, advertising materials, formulas and operating manuals. As the
misappropriation of such information, data or secrets would result in great
damage or loss to Westaff, you agree not to use any of it for your own benefit
and not to disclose it to, or allow the use of it by any person, firm or
corporation, whether during your Westaff employment or thereafter.

 

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

 

Providing Essential Staffing Services

 

 

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

 

7. Authority. You shall have no authority to enter into any contract or agreement or
otherwise bind Westaff without the prior consent of an office of Westaff.

 

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

 

9. Violation. You acknowledge that the obligations and restrictions set forth in this
Contract are reasonably necessary for the protection of Westaff’s business,
goodwill, property, and customer and employee relationships. You recognize that
irreparable damage will result to Westaff in the event of any violation of this
Contract and hereby agree to the issuance of a restraining order and/or an
injunction against you for such a violation, in addition to any other legal or
equitable remedies Westaff may have.

 

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

 

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

 

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

 

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

 

 

	
  Employee:

  	
    /s/ Matthew
  Parker

  	
   

  	
  Date:

  	
    3/20/06

  	
   

  
	
   

  	
  (Signature of employee)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Westaff (USA), Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Wendy
  A. Lewis

  	
   

  	
  Location:

  	
  Walnut Creek, CA 9913

  	
   

  
	
   

  	
  (Signature of Westaff representative)

  	
   

  	
   

  	
  (City,
  State and Westaff office number)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
    Wendy A. Lewis

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  HR. Coordinator

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