Exhibit 10
GENERAL EMPLOYMENT ENTERPRISES, INC.
1999 STOCK OPTION PLAN
Section 1. Purpose.
The purpose of the General Employment Enterprises, Inc. 1999
Stock Option Plan (the "Plan") is to benefit General Employment
Enterprises, Inc. (the "Company") and its Subsidiaries (as
defined in Section 2) by recognizing the contributions made to
the Company by officers and other key employees (including
members of the Board of Directors of the Company ("the
Directors") who are also employees) of the Company and its
Subsidiaries, to provide such persons with additional incentive
to devote themselves to the future success of the Company, and to
improve the ability of the Company to attract, retain and
motivate individuals, by providing such persons with a favorable
opportunity to acquire or increase their proprietary interest in
the Company. In addition, the Plan is intended as an additional
incentive to members of the Board of Directors of the Company who
are not employees of the Company ("Non-Employee Directors") to
serve on the Board of Directors of the Company (the "Board") and
to devote themselves to the future success of the Company by
providing them with a favorable opportunity to acquire or
increase their proprietary interest in the Company through
receipt of options to acquire common stock of the Company.
The Company may grant stock options that constitute
"incentive stock options" ("ISOs") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or stock options which do not constitute ISO ("NSOs")
(ISOs and NSOs being hereinafter collectively referred to as
"Options").
Section 2. Eligibility.
Non-Employee Directors shall participate in the Plan only in
accordance with the provisions of Section 5.2 of the Plan. The
Committee (as defined in Section 3) shall initially, and from
time to time thereafter, select those officers and other key
employees (including Directors of the Company who are also
employees) (collectively referred to herein as "Key Employees")
of the Company or any other entity of which the Company is the
direct or indirect beneficial owner of not less than fifty
percent (50%) of all issued and outstanding equity interests
("Subsidiaries"), to participate in the Plan on the basis of the
special importance of their services in the management,
development and operations of the Company or its Subsidiaries
(each such Key Employee receiving Options granted under the Plan
is referred to herein as an "Optionee").
Section 3. Administration.
3.1. The Committee. The Plan shall be administered by the
Stock Option Committee (the "Committee") of the Board of
Directors of the Company (the "Board"). The Committee shall be
comprised of two (2) or more members of the Board who are "non-
employee directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934.
3.2. Authority of the Committee. No person, other than
members of the Committee, shall have any authority concerning
decisions regarding the Plan. Subject to the express provisions
of this Plan, the Committee shall have sole discretion concerning
all matters relating to the Plan and Options granted hereunder.
The Committee, in its sole discretion, shall determine the Key
Employees of the Company and its Subsidiaries to whom, and the
time or times at which Options will be granted, the number of
shares to be subject to each Option, the expiration date of each
Option, the time or times within which the Option may be
exercised, the cancellation of the Option (with the consent of
the holder thereof) and the other terms and conditions of the
grant of the Option. The terms and conditions of the Options
need not be the same with respect to each Optionee or with
respect to each Option.
The Committee may, subject to the provisions of the Plan,
establish such rules and regulations as it deems necessary or
advisable for the proper administration of the Plan, and may make
determinations and may take such other action in connection with
or in relation to the Plan as it deems necessary or advisable.
Each determination or other action made or taken pursuant to the
Plan, including interpretation of the Plan and the specific terms
and conditions of the Options granted hereunder by the Committee
shall be final and conclusive for all purposes and upon all
persons including, but without limitation, the Company, its
Subsidiaries, the Committee, the Board, officers and the affected
employees of the Company and/or its Subsidiaries and their
respective successors in interest.
No member of the Committee shall, in the absence of bad
faith, be liable for any act or omission with respect to service
on the Committee. Service on the Committee shall constitute
service as a Director of the Company so that members of the
Committee shall be entitled to indemnification pursuant to the
Company's Certificate of Incorporation and By-Laws.
Section 4. Shares of Common Stock Subject to Plan.
4.1. The total number of shares of common stock, no par
value, of the Company (the "Common Stock"), that may be issued
and sold under the Plan within the Applicable Period (as defined
below) shall be 250,000. For purposes of the preceding sentence,
Applicable Period shall be the ten-year period commencing on
February 22, 1999 and ending on February 22, 2009. The
aforementioned total number of shares of Common Stock shall be
adjusted in accordance with the provisions of Section 4.2 hereof.
Notwithstanding the foregoing, the total number of shares of
Common Stock that may be subject to ISOs under the Plan shall be
250,000 shares of Common Stock, adjusted in accordance with the
provisions of Section 4.2 hereof. Any shares of Common Stock
subject to issuance upon exercise of Options but which are not
issued because of a surrender (other than pursuant to Sections
7.2 or 7.3 of the Plan), forfeiture, expiration, termination or
cancellation of any such Option, to the extent consistent with
applicable law, rules and regulations, shall once again be
available for issuance pursuant to subsequent Options.
4.2. The number of shares of Common Stock subject to the
Plan and to Options granted under the plan shall be adjusted as
follows: (a) in the event that the number of outstanding shares
of Common Stock is changed by any stock dividend, stock split or
combination of shares, the number of shares subject to the Plan
and to Options previously granted thereunder shall be
proportionately adjusted; (b) in the event of any merger,
consolidation or reorganization of the Company with any other
corporation or corporations, there shall be substituted on an
equitable basis as determined by the Board, in its sole
discretion, for each share of Common Stock then subject to the
Plan and for each share of Common Stock then subject to an Option
granted under the Plan, the number and kind of shares of stock,
other securities, cash or other property to which the holders of
Common Stock of the Company are entitled pursuant to the
transaction; and (c) in the event of any other change in the
capitalization of the Company, the Committee, in its sole
discretion, shall provide for an equitable adjustment in the
number of shares of Common Stock then subject to the Plan and to
each share of Common Stock then subject to an Option granted
under the Plan. In the event of any such adjustment, the
exercise price per share shall be proportionately adjusted.
Section 5. Grants of Options.
5.1. Grants of Options to Key Employees. Subject to the
terms of the Plan, the Committee may from time to time grant
Options, which may be ISOs or NSOs, to Key Employees of the
Company or any of its Subsidiaries. Unless otherwise expressly
provided at the time of the grant, Options granted under the Plan
to Key Employees will be ISOs.
5.2. Grants of Options to Non-Employee Directors. All
grants of Options to Non-Employee Directors shall be automatic
and non-discretionary. Each individual who is a Non-Employee
Director on the effective date of the Plan shall be granted
automatically a NSO to purchase 5,000 shares of Common Stock on
the effective date of the Plan. Each individual who becomes a
Non-Employee Director (other than a Non-Employee Director who was
previously an employee Director) after the effective date of the
Plan shall be granted automatically a NSO to purchase 5,000
shares of Common stock on the date he or she becomes a Non-
Employee Director.
5.3. Option Agreement. Each Option shall be evidenced by a
written Option Agreement specifying the type of Option granted,
the Option exercise price, the terms for payment of the exercise
price, the expiration date of the Option, the number of shares of
Common Stock to be subject to each Option and such other terms
and conditions established by the Committee, in its sole
discretion, not inconsistent with the Plan.
5.4. Expiration. Except to the extent otherwise provided in
or pursuant to Section 6, each Option shall expire, and all
rights to purchase shares of Common Stock shall expire, on the
tenth anniversary of the date on which the Option was granted.
5.5. Exercise Period. Except to the extent otherwise
provided in or pursuant to Section 6, or in the proviso to this
sentence, Options shall become exercisable pursuant to the
following schedule: with respect to one-fifth of the total
number of shares of Common Stock subject to Option on the date
twelve months after the date of its grant and with respect to an
additional one-fifth of the total number of shares of Common
Stock subject to the Option at the end of each twelve-month
period thereafter during the succeeding four years; provided,
however, that the Committee, in its sole discretion, shall have
the authority to shorten or lengthen the exercise schedule with
respect to any or all Options, or any part thereof, granted under
the Plan.
5.6. Required Terms and Conditions of ISOs. Each ISO
granted to a Key Employee shall be in such form and subject to
such restrictions and other terms and conditions as the Committee
may determine, in its sole discretion, at the time of grant,
subject to the general provisions of the Plan, the applicable
Option Agreement, and the following specific rules:
(a) Except as provided in Section 5.6(d), the per
share exercise price of each ISO shall be the Fair Market Value
of the shares of Common Stock on the date such ISO is granted.
(b) The aggregate Fair Market Value (determined with
respect to each ISO at the time such Option is granted) of
the shares of Common Stock with respect to which ISOs are
exercisable for the first time by an individual during any
calendar year (under all incentive stock option plans of the
Company and its parent and subsidiary corporations) shall
not exceed $100,000. If the aggregate Fair Market Value
(determined at the time of grant) of the Common Stock
subject to an Option that first becomes exercisable in any
calendar year exceeds the limitation of this Section 5.6(b),
so much of the Option that does not exceed the applicable
dollar limit shall be an ISO and the remainder shall be a
NSO; but in all other respects, the original Option
Agreement shall remain in full force and effect.
(c) As used in this Section 5, the words "parent" and
"subsidiary" shall have the meanings given to them in
Section 424(e) and 424(f) of the Code.
(d) Notwithstanding anything herein to the contrary,
if an ISO is granted to an individual who owns stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of
its parent or subsidiary corporations, within the meaning of
Section 422(b)(6) of the Code: (i) the purchase price of
each share of Common Stock subject to the ISO shall be not
less than one hundred ten percent (110%) of the Fair Market
Value of the Common Stock on the date the ISO is granted;
and (ii) the ISO shall expire and all rights to purchase
shares thereunder shall cease no later than the fifth
anniversary of the date the ISO was granted.
(e) No ISOs may be granted under the Plan after
February 22, 2009.
5.7. Required Terms and Conditions of NSOs. Each NSO
granted shall be in such form and subject to such restrictions
and other terms and conditions as the Committee may determine, in
its sole discretion, at the time of grant, subject to the general
provisions of the Plan, the applicable Option Agreement, and the
following specific rule: in no event may the exercise price be
less than the par value of the shares of Common Stock subject to
such NSO.
Section 6. Effect of Termination.
6.1. Key Employee Termination Generally. Except as provided
in Sections 6.2, 6.3 and 11, or by the Committee in its sole
discretion, any Option shall terminate on the date of the Key
Employee's termination of employment with the Company and its
Subsidiaries: (i) for Good Cause (as defined in the Option
Agreement); or (ii) voluntarily, for any other reason other than
retirement, death, or disability. A Key Employee's transfer of
employment from the Company to a Subsidiary, or from a Subsidiary
to the Company, or from a Subsidiary to another Subsidiary, shall
not constitute a termination of employment for purposes of the
Plan. Options granted under the Plan shall not be affected by
any change of duties in connection with the employment of the Key
Employee or by leave of absence authorized by the Company or a
Subsidiary.
6.2. Death and Disability. In the event of an Optionee's
death or Disability (as defined below) during employment or
service with the Company or any of its Subsidiaries, all Options
held by the Optionee shall become fully exercisable on such date
of death or Disability. Each of the Options held by such an
Optionee shall expire on the earlier of: (a) the first
anniversary of the date of the Optionee's death or Disability;
and (b) the date that such Option expires in accordance with its
terms. For purposes of this Section 6.2, "Disability" shall mean
the inability of an individual to engage in any substantial
gainful activity by reason of any medical determinable physical
or mental impairment which is expected to result in death or
which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months. The Committee, in
its sole discretion, shall determine the date of any Disability.
6.3. Retirement of Key Employees. In the event the
employment of a Key Employee with the Company and/or its
Subsidiaries shall be terminated by reason of Employee
Retirement, all Options held by the Key Employee shall become
fully exercisable. Each of the Options held by such a Key
Employee shall expire on the earlier of: (i) the first
anniversary of the date of the Employee Retirement; and (ii) the
date that such Option expires in accordance with its terms. For
purposes of this Section 6.3, "Employee Retirement" shall mean
retirement of a Key Employee after attaining age 55. In the
event the employment of a Key Employee with the Company and/or
its Subsidiaries shall be terminated by reason of a retirement
that is not an Employee Retirement as herein defined, the
Committee may, in its sole discretion, determine that the
exercisability and exercise periods set forth in this Section
6.3(a) shall be applicable to Options held by such Key Employee.
Notwithstanding the foregoing, in the event the employment of a
Key Employee who is also a Director of the Company is terminated
by reason of Employee Retirement, all Options held by the Key
Employee shall become fully exercisable, but each of the Options
held by such a Key Employee shall expire on the earlier of: (i)
the first anniversary of the date of the Key Employee's
termination of service on the Board for any reason; and (ii) the
date that such Option expires in accordance with its terms.
6.4. Retirement of Non-Employee Directors. In the event the
service of a Non-Employee Director on the Board shall be
terminated by reason of the retirement of such Non-Employee
Director of the Company in accordance with the Company's
retirement policy for Directors, any Option or Options granted to
such Non-Employee Director shall continue to vest and remain
exercisable pursuant to Section 5, in the same manner and to the
same extent as if such Director had continued his or her service
on the Board during such period.
Section 7. Exercise of Options.
7.1. Notice. A person entitled to exercise an Option may do
so by delivery of a written notice to that effect specifying the
number of shares of Common Stock with respect to which the Option
is being exercised and any other information the Committee may
prescribe. The notice shall be accompanied by payment as
described in Section 7.2. The notice of exercise shall be
accompanied by the Optionee's copy of the writing or writings
evidencing the grant of the Option. All notices or requests
provided for herein shall be delivered to the Secretary of the
Company.
7.2. Exercise Price. Except as otherwise provided in the
Plan or in any Option Agreement, the Optionee shall pay the
purchase price of the shares of Common Stock upon exercise of any
Option: (a) in cash; (b) in cash received from a broker-dealer to
whom the Optionee has submitted an exercise notice consisting of
a fully endorsed Option (however, in the case of an Optionee
subject to Section 16 of the 1934 Act, this payment option shall
only be available to the extent such insider complies with
Regulation T issued by the Federal Reserve Board); (c) by
delivering shares of Common Stock having an aggregate Fair Market
Value on the date of exercise equal to the Option exercise price;
(d) by directing the Company to withhold such number of shares of
Common Stock otherwise issuable upon exercise of such Option
having an aggregate Fair Market Value on the date of exercise
equal to the Option exercise price; (e) in the case of a Key
Employee, by such other medium of payment as the Committee, in
its discretion, shall authorize at the time of grant; or (f) by
any combination of (a), (b), (c), (d) and (e). In the case of an
election pursuant to (a) or (b) above, cash shall mean cash or a
check issued by a federally insured bank or savings and loan, and
made payable to the Company. In the case of payment pursuant to
(b), (c) or (d) above, the Optionee's election must be made on or
prior to the date of exercise and shall be irrevocable. In lieu
of a separate election governing each exercise of an Option, an
Optionee may file a blanket election with the Committee which
shall govern all future exercises of Options until revoked by the
Optionee. The Company shall issue, in the name of the Optionee,
stock certificates representing the total number of shares of
Common Stock issuable pursuant to the exercise of any Option as
soon as reasonably practicable after such exercise, provided that
any shares of Common Stock purchased by an Optionee through a
broker-dealer pursuant to clause (b) above shall be delivered to
such broker-dealer in accordance with 12 C.F.R. 220.3(e)(4) or
other applicable provision of law.
7.3. Taxes Generally. At the time of the exercise of any
Option, as a condition of the exercise of such Option, the
Company may require the Optionee to pay the Company an amount
equal to the amount of the tax the Company or any Subsidiary may
be required to withhold to obtain a deduction for federal and
state income tax purposes as a result of the exercise of such
Option by the Optionee or to comply with applicable law.
7.4. Payment of Taxes. At any time when an Optionee is
required to pay an amount required to be withheld under
applicable income tax or other laws in connection with the
exercise of an Option, the Optionee may satisfy this obligation
in whole or in part by: (a) directing the Company to withhold
such number of shares of Common Stock otherwise issuable upon
exercise of such Option having an aggregate Fair Market Value on
the date of exercise equal to the amount of tax required to be
withheld; or (b) delivering shares of Common Stock of the Company
having an aggregate Fair Market Value equal to the amount
required to be withheld. In the case of payment of taxes
pursuant to (a) or (b) above, the Optionee's election must be
made on or prior to the date of exercise and shall be
irrevocable. The Committee may disapprove any election or
delivery or may suspend or terminate the right to make elections
or deliveries. In lieu of a separate election governing each
exercise of an Option, an Optionee may file a blanket election
with the Committee which shall govern all future exercises of
Options until revoked by the Optionee.
Section 8. Transferability of Options.
No Option granted pursuant to the Plan shall be transferable
otherwise than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by
the Code. Notwithstanding the preceding sentence, an Optionee,
at any time prior to his death, may assign all or any portion of
an Option granted to him (other than an ISO) to (i) his spouse or
lineal descendant, (ii) the trustee of a trust for the primary
benefit of his spouse or lineal descendant, (iii) a partnership
of which his spouse and lineal descendants are the only partners,
or (iv) a tax exempt organization as described in Code Section
501 (c)(3). In such event, the spouse, lineal descendant,
trustee, partnership or tax exempt organization will be entitled
to all of the rights of the Optionee with respect to the assigned
portion of such Option, and such portion of the Option will
continue to be subject to all of the terms, conditions and
restrictions applicable to the Option, as set forth herein and in
the related Option Agreement immediately prior to the effective
date of the assignment. Any such assignment will be permitted
only if: (i) the Optionee does not receive any consideration
therefore; and (ii) the assignment is expressly permitted by the
applicable Agreement as approved by the Committee. Any such
assignment shall be evidenced by an appropriate written document
executed by the Optionee, and a copy thereof shall be delivered
to the Company on or prior to the effective date of the
assignment.
Section 9. Rights as Shareholder.
An Optionee or a transferee of an Optionee pursuant to
Section 8 shall have no rights as a shareholder with respect to
any Common Stock covered by an Option or receivable upon the
exercise of an Option until the Optionee or transferee shall have
become the holder of record of such Common Stock, and no
adjustments shall be made for dividends in cash or other property
or other distributions or rights in respect to such Common Stock
for which the record date is prior to the date on which the
Optionee shall have in fact become the holder of record of the
shares of Common Stock acquired pursuant to the Option.
Section 10. Change in Control.
10.1 Effect of Change in Control. Notwithstanding any of
the provisions of the Plan or any Option Agreement evidencing
Options granted hereunder, upon a Change in Control of the
Company (as defined in Section 10.2) all outstanding Options
shall become fully exercisable and all restrictions thereon shall
terminate in order that Optionees may fully realize the benefits
thereunder. Further, in addition to the Committee's authority
set forth in Section 3, the Committee, as constituted before such
Change in Control, is authorized, and has sole discretion, as to
any Option, either at the time such Option is granted hereunder
or any time thereafter, to take any one or more of the following
actions: (a) provide for the purchase of any such Option, upon
the Optionee's request, for an amount of cash equal to the
difference between the exercise price and the then Fair Market
Value of the Common Stock covered thereby had such Option been
currently exercisable; (b) make such adjustment to any such
Option then outstanding as the Committee deems appropriate to
reflect such Change in Control; and (c) cause any such Option
then outstanding to be assumed, by the acquiring or surviving
corporation, after such Change in Control.
10.2. Definition of Change in Control. A "Change in
Control of the Company" is deemed to occur upon:
(a) The receipt by the Company of a Schedule 13D
or other statement filed under Section 13(d) of the 1934
Act, indicating that any entity, person, or group has
acquired beneficial ownership, as that term is defined in
Rule 13d-3 under the 1934 Act, of more than 30% of the
outstanding capital stock of the Company entitled to vote
for the election of directors ("voting stock");
(b) The commencement by an entity, person, or group
(other than the Company or a Subsidiary) of a tender offer
or an exchange offer for more than 20% of the outstanding
voting stock of the Company;
(c) The effective time of: (i) a merger or
consolidation of the Company with one or more other
corporations as a result of which the holders of the
outstanding voting stock of the Company immediately prior to
such merger or consolidation hold less than 80% of the
voting stock of the surviving or resulting corporation; or
(ii) a transfer of substantially all of the property of the
Company other than to an entity of which the Company owns at
least 80% of the voting stock; or
(d) The election to the Board, without the
recommendation or approval of the incumbent Board, of the
lesser of: (i) three directors or (ii) directors
constituting a majority of the number of directors of the
Company then in office.
Section 11. Postponement of Exercise.
The Committee may postpone any exercise of an Option for
such time as the Committee in its sole discretion may deem
necessary in order to permit the Company: (a) to effect, amend or
maintain any necessary registration of the Plan or the shares of
Common Stock issuable upon the exercise of an Option under the
Securities Act of 1933, as amended, or the securities laws of any
applicable jurisdiction; (b) to permit any action to be taken in
order to (i) list such shares of Common Stock on a stock exchange
if shares of Common Stock are then listed on such exchange or
(ii) comply with restrictions or regulations incident to the
maintenance of a public market for its shares of Common Stock,
including any rules or regulations of any stock exchange on which
the shares of Common Stock are listed; or (c) to determine that
such shares of Common Stock and the Plan are exempt from such
registration or that no action of the kind referred to in (b)(ii)
above needs to be taken; and the Company shall not be obligated
by virtue of any terms and conditions of any Option or any
provision of the Plan to recognize the exercise of an Option or
to sell or issue shares of Common Stock in violation of the
Securities Act of 1933 or the law of any government having
jurisdiction thereof. Any such postponement shall not extend the
term of an Option and neither the Company nor its directors or
officers shall have any obligation or liability to an Optionee,
to the Optionee's successor or to any other person with respect
to any shares of Common Stock as to which the Option shall lapse
because of such postponement.
Section 12. Termination or Amendment of Plan.
The Board or the Committee may terminate, suspend, or amend
the Plan, in whole or in part, from time to time, without the
approval of the shareholders of the Company to the extent allowed
by law.
The Committee may correct any defect or supply an omission
or reconcile any inconsistency in the Plan or in any Option
granted hereunder in the manner and to the extent it shall deem
desirable, in its sole discretion, to effectuate the Plan.
No amendment or termination of the Plan shall in any manner
affect any Option theretofore granted without the consent of the
Optionee, except that the Committee may amend the Plan in a
manner that does affect Options theretofore granted upon a
finding by the Committee that such amendment is in the best
interest of holders of outstanding Options affected thereby.
Section 13. Effective Date.
The Plan has been adopted and authorized by the Board of
Directors for submission to the shareholders of the Company. If
the Plan is approved by the affirmative vote of a majority of the
shares of the voting stock entitled to be voted by the holders of
stock represented at a duly held shareholders' meeting, it shall
be deemed to have become effective as of such date, February 22,
1999.