Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement is made and entered into by and
between Labor Ready, Inc., a Washington corporation, including its subsidiaries
("Company") and Glenn A. Welstad ("Executive").
RECITALS
WHEREAS, Executive has been serving as Chairman, Chief Executive
Officer and President of the Company;
WHEREAS, Company believes that Executive's proven abilities,
experience, knowledge of corporate affairs, reputation and vision are of great
value to Company's future growth and profits; and
WHEREAS, Company wishes to continue to employ Executive and Executive
is willing to continue to be employed by Company; and
WHEREAS, the Company's Board of Directors has elected Executive to the
offices of Chairman, Chief Executive Officer and President of the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company and Executive agree as follows:
1. EMPLOYMENT. The Company agrees to and hereby does employ
Executive, and Executive agrees to and hereby agrees to continue in the
employment of the Company, subject to the supervision and direction of the Board
of Directors. Executive's employment shall be for a period commencing on January
1, 1999 and ending on December 31, 2003, unless such period is extended by
written agreement of the parties or is sooner terminated pursuant to the
provisions of Paragraphs 4, 10 or 11.
2. DUTIES OF EXECUTIVE. Executive agrees to devote the necessary
time, attention, skill, and efforts to the performance of his duties as
Chairman, Chief Executive Officer and President of the Company and such other
duties as may be assigned by the Board of Directors in their discretion.
3. COMPENSATION.
(a) Executive's initial salary shall be at the rate of Five
Hundred Thousand and No/100 Dollars ($500,000) per year, payable not less
frequently than monthly, from January 1, 1999 , until changed by the Board of
Directors as provided herein.
(b) Company, acting through its Board of Directors, may (but
shall not be required to) increase, but may not decrease, Executive's
compensation and award to Executive such bonuses as the board may see fit, in
its sole and unrestricted discretion, commensurate with Executive's performance
and the overall performance of the Company.
4. FAILURE TO PAY EXECUTIVE. The failure of Company to pay Executive
his salary as provided in Paragraph 3 may, in Executive's sole discretion, be
deemed a breach of this Agreement and, unless such breach is cured within
fifteen days after written notice to Company, this Agreement shall terminate.
Executive's claims against Company arising out of the nonpayment shall survive
termination of this Agreement.
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5. 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
Directors, or in the absence of such guidelines, by Executive's sound
discretion.
6. CHANGE IN OWNERSHIP OR CONTROL. In the event of a change in the
ownership of Company, effective control of Company, or the ownership of a
substantial portion of Company's assets, all unvested stock options shall
immediately vest.
7. LIABILITY INSURANCE AND INDEMNIFICATION. 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
$10,000,000.00 and may have a deductible of not more than $100,000.00. To the
fullest extent permitted by law, Company shall indemnify and hold harmless
Executive for any and all lost, cost, damage and expense including attorneys'
fees and court costs incurred or sustained by Executive, arising out of the
proper discharge by Executive of his duties hereunder in good faith.
8. BENEFITS. Executive shall be entitled to all benefits offered
generally to employees of Company. Nothing in this Agreement shall be construed
as limiting or restricting any benefit to 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.
9. SPLIT DOLLAR LIFE INSURANCE PLAN. Executive and his spouse have
established an irrevocable trust, The Welstad Irrevocable Trust No. 1, that will
be the owner and beneficiary of life insurance on the life of the Executive and
his spouse. The Company agrees to pay a portion of the premiums due on this life
insurance policy as an additional employment benefit to Executive. With respect
to this insurance plan, Executive and Company agree:
(a) The Welstad Irrevocable Trust No. 1 shall be the owner of
the life insurance policy and will possess all incidents of ownership in the
policy. The Company shall have a portion of the cash value and death benefit of
the life insurance policy collaterally assigned to it by the trustee of The
Welstad Irrevocable Trust No. 1 in order to secure repayment of the amounts
which the Company will pay toward the premiums on the policy.
(b) The Company shall pay its share of the premium when due. The
Company's share of the policy premium shall be $166,611 annually for a period of
ten (10) years from the date of this agreement.
(c) In the event of a termination of this Agreement under
Section 10 (a) or 11 (b) of this Agreement, the Split Dollar Agreement shall
provide that The Welstad Irrevocable Trust No. 1 shall repay the Company at any
time within the term of this Agreement an amount equal to the Company's share of
the premiums paid.
(d) Notwithstanding anything else in this Agreement to the
contrary, the Company's obligation to share in the payment of the policy premium
described in paragraph (b) above will survive termination of this Agreement for
any reason other than a termination pursuant to Section 10 (a) or 11 (b).
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10. TERMINATION BY COMPANY. Company may terminate this Agreement under
either of the following circumstances:
(a) This Agreement may be terminated for cause at any time upon
thirty (30) days written notice to Executive. Cause shall exist if Executive is
guilty of dishonesty, gross neglect of duty hereunder, or other act or omission
which impairs Company's ability to conduct its ordinary business in its usual
manner. The notice of termination shall specify with particularity the actions
or inactions 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.
(b) In the event that Executive shall, during the term of his
employment hereunder, 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.
11. TERMINATION BY EXECUTIVE. Executive may terminate this Agreement
under either of the following circumstances:
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(a) 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 15 of this Agreement shall terminate.
(b) Executive shall have the right to terminate this Agreement at
anytime and for any reason upon giving three (3) months written notice to
Company.
12. 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; provided, however, that nothing under 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.
13. BINDING EFFECT. This Agreement shall be binding on and shall inure to
the benefit of any successor or successors of employer and the personal
representatives of Executive.
14. CONFIDENTIAL INFORMATION.
(a) As the result of his duties, Executive will necessarily have
access to some or all of the confidential information pertaining to Company's
business. It is agreed that "Confidential Information" of Company includes:
(1) The ideas, methods, techniques, formats, specifications,
procedures, designs, systems, processes, data and software products which
are unique to Company;
(2) All customer, marketing, pricing and financial information
pertaining to the business of Company;
(3) All operations, sales and training manuals;
(4) All other information now in existence or later developed
which is similar to the foregoing; and
(5) All information which is marked as confidential or explained
to be confidential or which, by its nature, is confidential.
(b) Executive understands that he will necessarily have access to
some or all of the Confidential Information. Executive recognizes the importance
of protecting the confidentiality and secrecy of the Confidential Information
and, therefore, agrees to use his best efforts to protect the Confidential
Information from unauthorized disclosure to other persons. Executive understands
that protecting the Confidential Information from unauthorized disclosure is
critically important to the success and competitive advantage of Company and
that the unauthorized disclosure of the Confidential Information would greatly
damage Company.
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(c) Executive agrees not to disclose any Confidential Information to
others or use any Confidential Information for his own benefit. Executive
further agrees that upon request of the Chairman, President and Chief Executive
Officer of Company, he shall immediately return all Confidential Information,
including any copies of Confidential Information in his possession.
15. COVENANTS AGAINST COMPETITION. It is understood and agreed that the
nature of the methods employed in Company's business is such that Executive will
be placed in a close business and personal relationship with the customers of
Company. Thus, during the term of this Executive Employment Agreement and for a
period of two (2) years immediately following the termination of Executive's
employment, for any reason whatsoever, so long as Company continues to carry on
the same business, said Executive shall not, for any reason whatsoever, directly
or indirectly, for him or on behalf of, or in conjunction with, any other
person, persons, company, partnership, corporation or business entity:
(a) Call upon, divert, influence or solicit or attempt to call,
divert, influence or solicit any customer or customers of Company;
(b) Divulge the names and addresses or any information concerning any
customer of Company;
(c) Own, manage, operate, control, be employed by, participate 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 by Company
within a radius of twenty-five (25) miles from any then existing or proposed
office of Company; and
(d) Make any public statement or announcement, or permit anyone else
to make any public statement or announcement that Executive was formerly
employed by or connected with Company.
The time period covered by the covenants contained herein shall not
include any period(s) of violation of any covenant or any period(s) of time
required for litigation to enforce any covenant. 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 and that shall be enforceable.
16. ENFORCEMENT OF COVENANTS.
(a) The covenants set forth herein on the part of Executive shall be
construed as an agreement independent of any other provision in this Executive
Employment Agreement and the existence of any claim or cause of action of
Executive against Company, whether predicated on this Executive Employment
Agreement or otherwise, shall not constitute a defense to the enforcement by
Company of the covenants contained herein.
(b) Executive acknowledges that irreparable damage will result to
Company in the event of the breach of any covenant contained herein and
Executive agrees that in the event of any such breach, Company shall be
entitled, in addition to any and all other legal or equitable remedies and
damages, to a temporary and/or permanent injunction to restrain the violation
thereof by Executive and all of the persons acting for or with Executive.
17. LAW TO GOVERN CONTRACT. It is agreed that this Agreement shall be
governed by, construed, and enforced in accordance with the laws of the State of
Washington.
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18. ARBITRATION. Company and Executive agree with each other that any
claim of Executive arising out of or relating to this Agreement or the breach of
this Agreement or Executive's employment by Company, including, without
limitation, any claim for compensation due, wrongful termination and any claim
alleging discrimination or harassment in any form shall be resolved by binding
arbitration, except for claims in which injunctive relief is sought and
obtained. The arbitration shall be administered by the American Arbitration
Association under its Commercial Arbitration Rules at the American Arbitration
Association Office nearest the place of employment. The award entered by the
arbitrator shall be final and binding in all respects and judgment thereon may
be entered in any Court having jurisdiction.
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.
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. ATTORNEYS' 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 as set forth below, or such other address
as each party shall designate by notice.
24. SURVIVAL OF CERTAIN TERMS. The terms and conditions set forth in
Paragraphs 14, 15 and 16 of this Agreement shall survive termination of the
remainder of this Agreement.
IN WITNESS WHEREOF, each party to this Agreement has caused it to be
executed on the date indicated below.
EXECUTIVE: COMPANY:
Labor Ready, Inc.,
a Washington corporation
By:/s/______________________________ By:/s/______________________________
Glenn A. Welstad Ronald L. Junck
Executive Vice President
Date: JUNE 8, 1999 Date: JUNE 8, 1999
______________________________ ______________________________
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