EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement is made and entered into this ___ day
of October, 1995, by and between Labor Ready, Inc., a Washington corporation
("Company") and Glenn Welstad ("Executive").
WHEREAS, Executive has been a valued employee and key executive of the
Company and the parties wish to provide for his continued employment and
future services upon the terms and conditions set forth in this Agreement;
and
WHEREAS, it is the consensus of the board of directors that Executive's
services have been of exceptional merit, in excess of the compensation paid
and an invaluable contribution to the profits and position of the Company in
its field of activity. The board further believes that Executive's experience,
knowledge of corporate affairs, reputation and industry contacts are of such
value and his continued services essential to Company's future growth and
profits and that it would suffer great financial loss should Executive
terminate his services.
NOW THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Company and Executive agree as follows:
1. Termination of Prior Agreements. Effective as of October ____,
1995, all agreements previously entered into between Executive and Company
(whether Labor Ready, Inc., PNLF, Inc., Labor Ready of Southern Calif., Inc.,
or any other subsidiary company) concerning the employment and compensation of
Executive, are hereby terminated.
2. Employment. The Company agrees to and hereby does continue
Executive in its employment, and Executive agrees to and hereby does continue
in employment with the Company, as President and Chief Executive Officer of
the Company in charge of the operation of its business and affairs, subject to
the supervision and direction of its Board of Directors, for a period
commencing on October ___, 1995 and ending on December 31, 1998, unless such
period is extended by written agreement of the parties or is sooner terminated
pursuant to the provisions of Paragraphs 5, 12 or 13.
3. Duties of Executive. Executive agrees to continue to devote his
full time, attention, skill, and efforts to the performance of his duties as
Chief Executive Officer of the Company, and to the performance of all the
duties of the office of President of the Company and, if elected, of any
subsidiary or subsidiaries of the Company, all under the supervision and
direction of their respective boards of directors.
4. Compensation.
(a) Base Salary. Executive's base salary ("Base Salary") shall be at the
rate of Thirty One Thousand Two Hundred Fifty and No/100 Dollars ($31,250.00)
per month, payable semi-monthly, from the date of this Agreement. The Base
Salary amount shall be increased annually on the anniversary date of this
Agreement to 110% of the preceding years salary.
(b) Bonus. The Board of Directors, or the Compensation Committee, as the
case may be, may award to Executive such bonuses, from time to time, subject
to limitations imposed by agreement with lenders or others, as the board may
see fit, commensurate with Executive's performance and the overall performance
of the Company.
(c) Fringe Benefits. In addition to the compensation described in
Paragraphs 4.(a) and 4.(b), Executive shall also be entitled to fringe
benefits, including car allowances, insurance and other benefits, as shall be
provided in accordance with Company policy as it is developed from time to
time, by the Company's Board of Directors.
5. Death or Disability.
(a) In the event that Executive, during the term of his employment
hereunder, shall fail to perform his duties as the result of illness or other
incapacity and such illness or other incapacity shall continue for a period of
more than six months, the Company shall have the right, by written notice
either personally delivered or sent by certified mail, to terminate
Executive's employment hereunder as of a date (not less than 30 days after the
date of the sending of such notice) to be specified in such notice. Upon such
termination Executive shall be entitled to receive his compensation computed
as provided in Paragraph 4 hereof for a period of six (6) months following the
giving of such notice, or in the amount of $30,000.00, whichever is less;
provided, however, that if, prior to the date specified in such notice,
Executive's illness or incapacity shall have terminated and he shall have
taken up and performed his duties hereunder, Executive shall be entitled to
resume his employment hereunder as though such notice had not been given.
(b) In the event of Executive's death during the term of his employment
hereunder, his estate shall be entitled to receive his compensation computed
provided in Paragraph 4 hereof for a period of six (6) months following the
date of death, or in the amount of $30,000.00, whichever is less.
6. Qualified and Non-Qualified Options to Purchase Common Stock.
Company acting through its board of directors may from time to time, but shall
not be required to provide and deliver to Executive qualified and/or
non-qualified options to purchase the Company's common stock. Upon termination
of this Agreement for any reason, the exercise date of all outstanding
non-qualified stock options shall be accelerated, and shall be exercisable
only within six months from the date of termination.
7. Reimbursement for Expenses. Company shall reimburse Executive for
reasonable out-of-pocket expenses that Executive shall incur in connection
with his services for Company contemplated by this Agreement, on presentation
by Executive of appropriate vouchers and receipts for such expenses to
Company. At times it may be in the best interests of the Company for
Executive's spouse to accompany him on such business travel. On such occasions
Company shall reimburse Executive for reasonable out-of-pocket expenses
incurred for his spouse. Such occasions shall be determined by guidelines
established by the Board of sound discretion.
8. Automobile. The duties to be performed by Executive under the
provisions of this agreement will require the regular use of an automobile.
The parties agree that Executive shall be provided with a monthly car
allowance. The amount of the car allowance shall be $500.00 per month, and
shall remain fixed throughout the term of this Agreement.
9. Vacation. Executive shall be entitled each year during the term of
this Agreement to a vacation of twenty-three (23) days, no two of which need
be consecutive, during which time his compensation shall be paid in full. The
length of annual vacation time shall increase by one day for every year of
service to the Company after 1995 to a maximum of 35 days per year. Such
vacation time shall be accrued and may be taken by executive in accordance
standard Company policy governing Corporate executives..
10. Liability Insurance. The Company shall procure and maintain
throughout the term of this Agreement a policy or policies of liability
insurance for the protection and benefit of directors and officers of the
Company. Such insurance shall have a combined limit of not less than
$2,000,000.00 and may have a deductible of not more than $100,000.00.
11. Other Benefits. Nothing in this Agreement shall be construed as
limiting or restricting any benefit of Executive, under any pension,
profit-sharing or similar retirement plan, or under any group life or group
health or accident or other plan of the Company, for the benefit of its
employees generally or a group of them, now or hereafter in existence, nor
shall any payment under this Agreement be deemed to constitute payment to
Executive, in lieu of or in reduction of any benefit or payment under any such
plan.
12. Termination by Company. Company may terminate this Agreement for
cause at any time upon thirty (30) days written notice to Executive. Cause
shall exist if the Company's Board of Directors determines, in good faith,
that Executive has been dishonest, has grossly neglected his duties
hereunder, or has committed some other act or omission which substantially
impairs Company's ability to conduct its ordinary business in its usual
manner. The notice of termination shall specify with particularity the
actions or inaction's constituting such cause. In the event of termination
under this section, Company shall pay Executive all amounts due hereunder
which are then accrued but unpaid within thirty (30) days after Executive's
last day of employment.
13. Termination by Executive. If Company shall cease conducting its
business, take any action looking toward its dissolution or liquidation, make
an assignment for the benefit of its creditors, admit in writing its inability
to pay its debts as they become due, file a voluntary petition or be the
subject of an involuntary petition in bankruptcy, or be the subject of any
state or federal insolvency proceeding of any kind, then Executive may, in his
sole discretion, by written notice to Company, terminate his employment and
Company hereby consents to the release of Executive under such circumstances
and agrees that if Company ceases to operate or to exist as a result of such
event, the non-competition and other provisions of Paragraph 17 of this
Agreement shall terminate. In the event of termination by executive pursuant
to this Paragraph 13, executive shall be entitled to payment of salary and
other benefits and expense reimbursements accrued up to the date of such
termination, and any outstanding stock options shall be exercisable for six
months in accordance with Paragraph 6 of this Agreement, but Executive shall
not be entitled to any other termination payments under this Agreement.
14. Communications to Company. Executive shall communicate and
channel to Company all knowledge, business, and customer contacts and any
other matters of information that could concern or be in any way beneficial to
the business of Company, whether acquired by Executive before or during the
term of this Agreement shall be construed as requiring such communications
where the information is lawfully protected from disclosure as a trade secret
of a third party.
15. Binding Effect. This Agreement shall be binding on and shall
inure to tile benefit of any successor or successors of employer and the
personal representatives of Executive.
16. Non-Competition after Termination. Executive agrees that, in
addition to any other limitation, for a period of two years after the
termination of his employment under this Agreement (except a termination
pursuant to an event described in Paragraph 14, above), Executive will not
directly or indirectly engage, or in any manner be connected with or employed
by any person, firm, corporation, or other entity in competition with Company
or engaged in providing unskilled or semi-skilled temporary workers within the
United States, Canada, and in such foreign jurisdictions as the Company now
conducts business or hereafter, during the term of this Agreement,
contemplates conducting business. If the provisions set forth are determined
to be too broad to be enforceable at law, then the area and/or length of time
shall be reduced to such area and time that shall be enforceable.
17. Use of Confidential Information. Executive agrees that, in
addition to any other limitation contained in this Agreement, regardless of
the circumstances of the termination of employment, he will not use for his
own benefit or communicate to any person, firm, corporation, or other entity
any information relating to customer lists, prices, advertising, nor any
confidential knowledge or secrets that Executive might from time to time
acquire with respect to the business of the Company, or any of its affiliates
or subsidiaries. If the provisions set forth herein are determined to be too
broad to be enforceable at law, then such provisions shall be limited in
application so that they shall be enforceable.
18. Law to Govern Contract. It is agreed that this Agreement shall be
governed by, construed, and enforced in accordance with the laws of the
Washington.
19. Entire Agreement. This Agreement shall constitute the
entire agreement between the parties and any prior understanding or
representation of any kind preceding the date of this Agreement shall not be
binding upon either party except to the extent incorporated in this
Agreement.
20. Modification of Agreement. Any modification of this Agreement or
additional obligation assumed by either party in connection with this
Agreement shall be binding only if evidenced in writing signed by each party
or an authorized representative of each party. This Agreement may not be
modified without the written consent of the Seacoast Capital Partners Limted
Partnership, Allied Investment Corporation, Allied Investment Corporation II,
and Allied Capital Corporation II (hereafter collectively the "Purchasers"),
so long as the provisions governing Executive Compensation of that certain
Note Purchase Agreement dated October ___, 1995, between Labor Ready, Inc., et
al., and Purchasers, and that certain Warrant Purchase Agreement dated October
___, 1995, between Labor Ready, Inc., et al., and Purchasers shall survive.
21. No Waiver. The failure of either party to this Agreement to
insist upon the performance of any of the terms and conditions of this
Agreement, or the waiver of any breach of any of the terms and conditions of
this Agreement, shall not be construed as thereafter waiving any such terms
and conditions, but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred.
22. Attorney Fees. In the event that any action is filed in relation
to this Agreement, the unsuccessful party in the action shall pay to the
successful party, in addition to all other required sums, a reasonable sum for
the successful party's attorneys' fees
23. Notices. Any notice provided for or concerning this Agreement
shall be in writing and shall be deemed sufficiently given when personally
delivered or when sent by certified or registered, return receipt requested
mail if sent to the respective address of each party shall designate by
notice.
IN WITNESS WHEREOF, each party to this Agreement has caused it to
be executed at Tacoma, Washington on the date first above written.
COMPANY: LABOR READY, INC.
By:____________________________
John R. Coghlan, Secretary
EXECUTIVE: GLENN WELSTAD
_____________________________