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EXHIBIT 10.10
SNELLING AND SNELLING, INC.
1997 STOCK OPTION PLAN
INTRODUCTION
On October 10, 1997, the Board of Directors of the Company adopted the
Snelling and Snelling, Inc. 1997 Stock Option Plan as set forth herein:
1. PURPOSE. The purpose of the Plan is to provide key employees
with a proprietary interest in the Company through the granting of options
which will:
(a) create stockholder value by providing incentives to selected
key employees who contribute, and are expected to contribute,
materially to the success of the Company;
(b) provide a means of rewarding outstanding performance by such
key employees;
(c) enhance the interests of such key employees in the Company's
continued success and progress; and
(d) enhance the Company's ability to maintain a competitive
position in attracting and retaining qualified key personnel
necessary for the continued success and progress of the
Company.
2. ADMINISTRATION. The Plan shall be administered by the
Committee.
3. PARTICIPANTS. The Committee shall, from time to time, select
the particular key employees of the Company and its Subsidiaries (as defined
herein) to whom options are to be granted, and who will, upon such grant,
become participants in the Plan. For purposes of the Plan, "key employees" are
those officers and employees (including officers and key employees who are
members of the Board) whose performance and responsibilities are determined by
the Committee to be influential to the success of the Company.
4. STOCK OWNERSHIP LIMITATION. No Incentive Option may be granted
to an employee who owns more than 10% of the voting power of all classes of
stock of the Company or its Subsidiaries. This limitation will not apply if the
option price is at least 110% of the fair market value of the stock at the time
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the Incentive Option is granted and the Incentive Option is not exercisable
more than five years from the date it is granted.
5. SHARES SUBJECT TO PLAN. The Committee may not grant options
under the Plan for more than 1,500,000 shares of Class A Common Stock, $0.01
par value, or grant options under the Plan to any single key employee in excess
of such number of shares; provided, however, that this number may be adjusted
to reflect, if deemed appropriate by the Committee, any stock dividend, stock
split, share combination, recapitalization or the like, of or by the Company.
Shares to be optioned and sold may be made available from either authorized but
unissued Class A Common Stock or Class A Common Stock held by the Company in
its treasury. Shares that by reason of the expiration of an option or otherwise
are no longer subject to purchase pursuant to an option granted under the Plan
may be re-offered under the Plan.
6. LIMITATION ON AMOUNT. The aggregate fair market value
(determined at the time of grant) of the shares of Class A Common Stock that
any employee is first eligible to purchase in any calendar year by exercise of
Incentive Options granted under this Plan and all incentive stock option plans
of the Company or its Subsidiaries shall not exceed $100,000. For this purpose,
the fair market value (determined at the respective date of grant of each
option) of the stock purchasable by exercise of an Incentive Option (or an
installment thereof) shall be counted against the $100,000 annual limitation
for an employee only for the calendar year such stock is first purchasable
under the terms of the option.
7. ALLOTMENT OF SHARES. The Committee shall determine the number
of shares of Class A Common Stock to be offered from time to time by grant of
options to employees of the Company or its Subsidiaries. The grant of an option
to an employee shall not be deemed either to entitle the employee to, or to
disqualify the employee from, participation in any other grant of options under
the Plan.
8. GRANT OF OPTIONS. All options granted under the Plan shall be
granted by the Committee, which is authorized to grant Incentive Options,
Nonqualified Options, or a combination of both, under the Plan. The grant of
options shall be evidenced by stock option agreements containing such terms
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and provisions as are approved by the Committee, but not inconsistent with the
Plan, including provisions that may be necessary to assure that any option that
is intended to be an Incentive Option will comply with Section 422 of the Code.
The Company shall execute stock option agreements upon instructions from the
Committee. The terms of any stock option agreement executed by the Company
shall not be amended, modified, or changed without the written consent of both
the Company and the employee. The Plan shall be submitted to the Company's
shareholders for approval. The Committee may grant options under the Plan prior
to the time of shareholder approval, which options will be effective when
granted, but if for any reason the shareholders of the Company do not approve
the Plan prior to one year from the date of adoption of the Plan by the Board,
all options granted under the Plan will be terminated and of no effect, and no
option may be exercised in whole or in part prior to such shareholder approval.
9. OPTION PRICE. The option price for an option granted pursuant
to the Plan shall not be less than 100% of the fair market value per share of
the Class A Common Stock on the date the option is granted. The Committee shall
determine the fair market value of the Class A Common Stock on the date of
grant and shall set forth the determination in its minutes, using any
reasonable valuation method.
10. OPTION PERIOD. The Option Period will begin on the date the
option is granted, which will be the date the Committee authorizes the option
unless the Committee specifies a later date. Subject to the provisions of
Section 4, no option may terminate later than ten years from the date the
option is granted. Subject to the provisions hereof, specifically including,
but not limited to, the provisions of Sections 4, 5, 6 and 9, the Committee may
provide for the exercise of options in installments and upon such terms,
conditions and restrictions as it may determine. The Committee may provide for
termination of the option in the case of termination of employment or any other
reason.
11. RIGHTS IN EVENT OF DEATH OR DISABILITY. If a participant dies
or becomes disabled [within the meaning of Section 22(e)(3) of the Code] prior
to termination of his right to exercise an option in accordance with the
provisions of his stock option agreement without having totally exercised the
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option, the option agreement may provide that it may be exercised, to the
extent of the shares with respect to which the option could have been exercised
by the participant on the date of the participant's death or disability, (i) in
the case of death, by the participant's estate or by the person who acquired
the right to exercise the option by bequest or inheritance or by reason of the
death of the participant, or (ii) in the case of disability, by the participant
or his personal representative, provided the option is exercised prior to the
date of its expiration or 365 days from the date of the participant's death or
disability, whichever first occurs. The date of disability of a participant
shall be determined by the Committee.
12. PAYMENT. Full payment for shares purchased upon exercising an
option shall be made in cash or by check or by tendering shares of either Class
A Common Stock or Class B Common Stock, par value $0.01 per share, of the
Company at the fair market value per share at the time of exercise, or on such
other terms as are set forth in the applicable option agreement. No shares may
be issued until full payment of the purchase price therefor has been made, and
a participant will have none of the rights of a shareholder until shares are
issued to him.
13. EXERCISE OF OPTION. Options granted under the Plan may be
exercised during the Option Period, at such times, in such amounts, in
accordance with such terms and subject to such restrictions as are set forth in
the applicable stock option agreements, including, if deemed appropriate by the
Committee, the execution of an employee- shareholder agreement setting forth
restrictions on transfer and other restrictions and limitations relating to the
Class A Common Stock and the Company's repurchase rights. In no event may an
option be exercised or shares be issued pursuant to an option if any requisite
action, approval or consent of any governmental authority of any kind having
jurisdiction over the exercise of options shall not have been taken or secured.
14. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of shares
of Class A Common Stock covered by each outstanding option granted under the
Plan and the option price may be adjusted to reflect, as deemed appropriate by
the Committee, any stock dividend, stock split, share
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combination, exchange of shares, recapitalization, merger, consolidation,
separation, reorganization, liquidation or the like, of or by the Company.
15. NON-ASSIGNABILITY. Options may not be transferred other than
by will or by the laws of descent and distribution. During a participant's
lifetime, options granted to a participant may be exercised only by the
participant.
16. INTERPRETATION. The Committee shall interpret the Plan and
shall prescribe such rules and regulations in connection with the operation of
the Plan as it determines to be advisable for the administration of the Plan.
The Committee may rescind and amend its rules and regulations.
17. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or
discontinued by the Board without the approval of the shareholders of the
Company, except that any amendment that would (a) materially increase the
number of securities that may be issued under the Plan, or (b) materially
modify the requirements of eligibility for participation in the Plan must be
approved by the shareholders of the Company.
18. EFFECT OF PLAN. Neither the adoption of the Plan nor any
action of the Board or the Committee shall be deemed to give any officer or
employee any right to be granted an option to purchase Class A Common Stock or
any other rights except as may be evidenced by the stock option agreement, or
any amendment thereto, duly authorized by the Committee and executed on behalf
of the Company and then only to the extent and on the terms and conditions
expressly set forth therein.
19. TERM. Unless sooner terminated by action of the Board, this
Plan will terminate on June 30, 2007. The Board may not grant options under the
Plan after that date, but options granted before that date will continue to be
effective in accordance with their terms.
20. DEFINITIONS. For the purpose of this Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:
(a) "Board" means the Board of Directors of the Company.
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(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee of two or more members of the
Board appointed by the Board to administer the Plan, or in the
absence of such a committee, shall mean the entire Board.
(d) "Class A Common Stock" means the Class A Common Stock, par
value $0.01 per share, which as of the date hereof the Board
of Directors of the Company has authorized and approved and
which, subject to the filing of the Company's Articles of
Amendment with the Department of State of the Commonwealth of
Pennsylvania to amend and restate its Articles of
Incorporation, and upon the effectiveness of the Company's
initial public offering, the Company will be authorized to
issue, or such other common stock as may in the future be
authorized to be issued (as long as the common stock varies
from the Class A Common Stock, if at all, only in amount of
par value).
(e) "Company" means Snelling and Snelling, Inc., a Pennsylvania
corporation.
(f) "Incentive Option" means an option granted under the Plan
which meets the requirements of Section 422 of the Code.
(h) "Nonqualified Option" means an option granted under the Plan
which is not intended to be an Incentive Option.
(h) "Option Period" means the period during which an option may be
exercised.
(i) "Plan" means this 1997 Stock Option Plan, as amended from time
to time.
(j) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of the
granting of the option, each of the corporations other than
the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the
chain, and "Subsidiaries" means more than one of any such
corporations.
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SNELLING AND SNELLING, INC.
INCENTIVE STOCK OPTION AGREEMENT
1. Grant of Option. Pursuant to the Snelling and Snelling, Inc.
1997 Stock Option Plan (the "Plan") for key employees of Snelling and Snelling,
Inc. (the "Company") and its subsidiaries, the Company grants to
-------------------------
(the "Option Holder")
an incentive option to purchase from the Company a total of __________ shares
of Class A Common Stock, $0.01 par value, of the Company (the "Common Stock")
at $_______ per share (being at least the fair market value per share of the
Common Stock on the date of this grant), in the amounts, during the periods and
upon the terms and conditions set forth in this Agreement. This option is
intended to constitute an incentive option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
2. Time of Exercise. Except only as specifically provided
elsewhere in this Agreement, this option is exercisable in the following
cumulative installments:
First installment. Up to 20% of the total number of optioned shares at
any time on or after a date that is 365 days from the grant date set
forth in Section 14 hereof.
Second installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is two years from
the grant date set forth in Section 14 hereof.
Third installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is three years from
the grant date set forth in Section 14 hereof.
Fourth installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is four years from
the grant date set forth in Section 14 hereof.
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Fifth installment. Up to an additional 20% of the total number of optioned
shares at any time on or after a date that is five years from the grant date set
forth in Section 14 hereof.
If an installment covers a fractional share, such installment will be rounded
off to the next highest share, except the final installment, which will be for
the balance of the total optioned shares. Upon the termination of the Option
Holder's employment for any reason, with or without good cause, this option
will be exercisable only to the extent and for the number of shares for which
the Option Holder could have exercised it on the date of his termination of
employment.
3. Exercise of Option. The exercise of this option shall entitle
the Option Holder to purchase shares of Common Stock of the Company. If
requested by the Option Holder and approved by the committee (the "Committee")
appointed pursuant to the terms of the Plan by the Board of Directors of the
Company (the "Board) to administer the Plan, the Option Holder may exercise
this option or any portion hereof by tendering shares of Common Stock, in lieu
of cash payment for the option shares being purchased, with the number of
shares tendered to be determined based on the closing price per share of the
Common Stock on the date of exercise, as quoted on the Nasdaq National Market
or successor stock exchange thereto, or if not so quoted, as determined by the
Committee.
4. Subject to Plan. This option and the grant and exercise thereof
are subject to the terms and conditions of the Plan, which are incorporated
herein by reference and made a part hereof, but the terms of the Plan shall not
be considered an enlargement of any benefits under this Agreement. In
addition, this option is subject to any rules and regulations promulgated
pursuant to the Plan, now or hereafter in effect.
5. Term. This option will terminate at the first of the following:
(a) 5 p.m. on ______________, 20__.
(b) 5 p.m. on the date 365 days following the date of the Option
Holder's death or disability (as described in Section 6).
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(c) 5 p.m. on the date three months following the date the Option
Holder's employment with the Company terminates for reasons
other than "good cause" (as hereinafter defined) or for a reason
described in Section 5(b) above.
(d) Upon the termination of the Option Holder's employment with the
Company for "good cause", this option will terminate immediately
and the Option Holder will forfeit any right to exercise any
portion of this option. As used in this Agreement, "good cause"
shall mean Option Holder's (i) commission of a felony or any
other criminal act which the Board considers materially damaging
to the reputation of the Company, (ii) fraud, (iii) dishonesty,
self-dealing, or embezzlement, (iv) violation of the Company's
published policies, (v) gross or intentional neglect of duty,
(vi) failure or unwillingness to perform substantially and
faithfully Option Holder's duties hereunder (other than a
failure due to Option Holder's disability, as described in
Section 6); provided, however, in the event "good cause" relates
to items (iv) through (vi) above, then the Company shall notify
Option Holder of such cause, and if such violation can be cured,
Option Holder shall have 30 days from receipt of notice to cure
such violations.
6. Who May Exercise. During the lifetime of the Option Holder,
this option may be exercised only by the Option Holder. If the Option Holder
dies or becomes disabled [within the meaning of Section 22(e)(3) of the Code]
prior to the termination date specified in Section 5 hereof without having
exercised the option as to all of the shares covered hereby, the option may be
exercised on the date of his death or disability at any time prior to the
earlier of the dates specified in Sections 5(a) and (b) hereof by (i) the
Option Holder's estate or a person who acquired the right to exercise the
option by bequest or inheritance or by reason of the death of the Option Holder
in the event of the Option Holder's death, or (ii) the Option Holder or his
personal representative in the event of the Option Holder's disability, subject
to the other terms of this Agreement, the Plan and applicable laws, rules and
regulations. For purposes of this Agreement, the Committee shall determine the
date of disability of the Option Holder.
7. Restrictions on Exercise. This option:
(a) may be exercised only with respect to full shares and no
fractional share of stock shall be issued;
(b) may not be exercised in whole or in part and no cash or
certificates representing shares subject to such option shall be
delivered, if any requisite approval or consent of any
government authority of any kind having jurisdiction over the
exercise of options shall not have been secured; and
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(c) may be exercised only if at all times during the period
beginning with the date of the granting of the option and ending
on the date three months prior to the date of exercise the
Option Holder was an employee of either the Company or a
subsidiary of the Company; provided, however, if the Option
Holder's continuous employment is terminated by disability or
death, or if the Option Holder dies within said three-month
period, the option may be exercised in accordance with Section
5(b), or if the Option Holder's continuous employment is
terminated for good cause, the option will terminate as provided
in Section 5(d).
8. Manner of Exercise. Subject to such administrative regulations
as the Committee may from time to time adopt, the Option Holder or, if
applicable, Option Holder's beneficiary shall, in order to exercise this
option:
(a) give written notice to the Committee of the exercise price and
the number of shares which he will purchase and furnish an
undertaking to make payment of such exercise price in United
States dollars before issuance of such shares; or
(b) give written notice to the Committee of the exercise price and
the number of shares for which he is requesting approval from
the Committee to tender other shares of Common Stock in exchange
for option shares.
Any notice shall include an undertaking to furnish or execute such
documents as the Committee in its discretion shall deem necessary (i) to
evidence such exercise, in whole or in part, of the option evidenced by this
Agreement, (ii) to determine whether registration is then required under the
Securities Act of 1933, or any other law, as then in effect, and (iii) to
comply with or satisfy the requirements of the Securities Act of 1933, or any
other law, as then in effect.
In addition, if an exercise under paragraph (b) above is requested, the
notice shall include an undertaking to tender to the Company (i) promptly after
receipt of denial by the Committee of the paragraph (b) request, full payment
in United States dollars of the option exercise price for the shares being
purchased hereunder or (ii) promptly after receipt of approval by the Committee
of exercise of this option or portion thereof by payment of Common Stock, full
payment in Common Stock in exchange for the shares being purchased hereunder.
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The Committee shall advise the Option Holder or beneficiary in writing,
within ten business days after the first meeting of the Committee following the
date of exercise, whether the Committee approves the exchange of Common Stock
for option stock being purchased. The Company must receive full payment in
United States dollars or the appropriate number of shares of Common Stock,
whichever applies, of the option exercise price within five business days after
the date of the Committee's notice, unless the Committee extends the time of
payment.
9. Non-Assignability. This option is not assignable or
transferable by the Option Holder except by will or by the laws of descent and
distribution.
10. Rights of Shareholder. The Option Holder will have no rights as
a shareholder with respect to any shares covered by this option until the
issuance of a certificate or certificates to the Option Holder for the shares.
Except as otherwise provided in Section 11 hereof, no adjustment shall be made
for dividends or other rights for which the record date is prior to the
issuance of such certificate or certificates.
11. Capital Adjustments; Antidilution. The number of shares of
Common Stock covered by this option, and the option price thereof, shall be
subject to such adjustment as the Board deems appropriate to reflect any stock
dividend, stock split, share combination, exchange of shares, recapitalization,
merger, consolidation, separation, reorganization, liquidation or the like, of
or by the Company.
12. Change in Control of the Company. In the event (i) the Company
sells more than 51% of its assets, (ii) becomes a party to any merger,
consolidation or corporate reorganization, and as the result of which the
Company shall not be the surviving corporation, or (iii) any other person or
entity makes a tender or exchange offer for Common Stock of the Company whereby
such other person or entity would own more than 51% of the outstanding Common
Stock of the Company (the surviving corporation, purchaser, or tendering person
being collectively referred to as the "purchaser", and the applicable action
being referred to as the "transaction"), then the Board may, at its election,
(a) reach an agreement with the purchaser that
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the purchaser will assume the obligation of the Company under the option; (b)
reach an agreement with the purchaser that the purchaser will convert the
option into an option of at least equal value, determined as of the date of the
transaction, as to stock of the purchaser; or (c) not later than twenty days
prior to the effective date of such transaction, notify the Option Holder and
afford to the Option Holder a right for ten days after the date of such notice
to exercise all or any portion of the shares of Common Stock covered by this
option that have not been exercised and that the time for exercising such
shares of Common Stock has not expired pursuant to this Agreement. Within the
ten-day period described in clause (c) above, the Option Holder may exercise
any portion of the shares described in the preceding sentence as he may desire
and deposit with the Company the requisite cash to purchase in full the Common
Stock thereby exercised, in which case the Company shall, prior to the
effective date of the transaction, transfer to the Option Holder all shares of
Common Stock thus exercised, which shall be treated as owned by the Option
Holder for purposes of the transaction.
13. Law Governing. This Agreement is intended to be performed in
the State of Texas and shall be construed and enforced in accordance with and
governed by the laws of such State.
14. Date of Grant. The date of grant of this option is ___________,
_________.
15. Shareholder Approval. This option is subject to the approval of
the Plan, prior to ______________, 1998, by the shareholders of the Company.
Subject to such approval, this option is effective on the date of grant
specified in Section 14. If the Plan is not so approved, this option will be
of no effect. No portion of this option may be exercised prior to such
approval.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and the Option Holder, to evidence his consent
and approval of all the terms hereof, has duly executed this Agreement, as of
the date specified in Section 14 hereof.
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SNELLING AND SNELLING, INC.
By
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Option Holder
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SNELLING AND SNELLING, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
1. Grant of Option. Pursuant to the Snelling and Snelling, Inc. 1997
Stock Option Plan (the "Plan") for key employees of Snelling and Snelling, Inc.
(the "Company") and its subsidiaries, the Company grants to
-----------------------
(the "Option Holder")
a nonqualified option to purchase from the Company a total of ____________
shares of Class A Common Stock, $0.01 par value, of the Company (the "Common
Stock") at $______ per share (representing at least the fair market value of
the Common Stock on the date of this grant), in the amounts, during the periods
and upon the terms and conditions set forth in this Agreement. This option is
not intended to constitute an incentive option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Time of Exercise. Except only as specifically provided elsewhere
in this Agreement, this option is exercisable in the following cumulative
installments:
First installment. Up to 20% of the total number of optioned shares at
any time on or after a date that is 365 days from the grant date set
forth in Section 14 hereof.
Second installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is two years from
the grant date set forth in Section 14 hereof.
Third installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is three years
from the grant date set forth in Section 14 hereof.
Fourth installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is four years from
the grant date set forth in Section 14 hereof.
Fifth installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is five years from
the grant date set forth in Section 14 hereof.
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If an installment covers a fractional share, such installment will be rounded
off to the next highest share, except the final installment, which will be for
the balance of the total optioned shares. Upon the termination of the Option
Holder's employment for any reason, with or without good cause, this option
will be exercisable only to the extent and for the number of shares for which
the Option Holder could have exercised it on the date of his termination of
employment.
3. Exercise of Option. The exercise of this option shall entitle
the Option Holder to purchase shares of Common Stock of the Company. If
requested by the Option Holder and approved by the committee (the "Committee")
appointed pursuant to the terms of the Plan by the Board of Directors of the
Company (the "Board") to administer the Plan, the Option Holder may exercise
this option or any portion hereof by tendering shares of Common Stock, in lieu
of cash payment for the option shares being purchased, with the number of
shares tendered to be determined based on the closing price per share of the
Common Stock on the date of exercise, as quoted on the Nasdaq National Market
or successor stock exchange thereto, or if not so quoted, as determined by the
Committee.
4. Subject to Plan. This option and the grant and exercise thereof
are subject to the terms and conditions of the Plan, which are incorporated
herein by reference and made a part hereof, but the terms of the Plan shall not
be considered an enlargement of any benefits under this Agreement. In
addition, this option is subject to any rules and regulations promulgated
pursuant to the Plan, now or hereafter in effect.
5. Term. This option will terminate at the first of the following:
(a) 5 p.m. on ____________, 20___.
(b) 5 p.m. on the date 365 days following the date of the Option
Holder's death or disability (as described in Section 6).
(c) 5 p.m. on the date three months following the date the Option
Holder's employment with the Company terminates for reasons
other than "good cause" (as hereinafter defined) or for a
reason described in Section 5(b) above.
(d) Upon the termination of the Option Holder's employment with
the Company for "good cause", this option will terminate
immediately and the Option Holder will forfeit any right
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to exercise any portion of this option. As used in this
Agreement, "good cause" shall mean Option Holder's (i)
commission of a felony or any other criminal act which the
Board considers materially damaging to the reputation of the
Company, (ii) fraud, (iii) dishonesty, self-dealing, or
embezzlement, (iv) violation of the Company's published
policies, (v) gross or intentional neglect of duty, (vi)
failure or unwillingness to perform substantially and
faithfully Option Holder's duties hereunder (other than a
failure due to Option Holder's disability, as described in
Section 6); provided, however, in the event "good cause"
relates to items (iv) through (vi) above, then the Company
shall notify Option Holder of such cause, and, if such
violation can be cured, Option Holder shall have 30 days from
receipt of notice to cure such violation.
6. Who May Exercise. During the lifetime of the Option Holder, this
option may be exercised only by the Option Holder. If the Option Holder dies
or becomes disabled [within the meaning of Section 22(e)(3) of the Code] prior
to the termination date specified in Section 5 hereof without having exercised
the option as to all of the shares covered hereby, the option may be exercised
to the extent the Option Holder could have exercised the option on or after the
date of his death or disability at any time prior to the earlier of the dates
specified in Sections 5(a) and (b) hereof by (i) the Option Holder's estate or
a person who acquired the right to exercise the option by bequest or
inheritance or by reason of the death of the Option Holder in the event of the
Option Holder's death, or (ii) the Option Holder or his personal representative
in the event of the Option Holder's disability, subject to the other terms of
this Agreement, the Plan and applicable laws, rules and regulations. For
purposes of this Agreement, the Committee shall determine the date of
disability of the Option Holder.
7. Restrictions on Exercise. This option:
(a) may be exercised only with respect to full shares and no
fractional share of stock shall be issued;
(b) may not be exercised in whole or in part and no certificates
representing shares subject to such option shall be delivered,
if any requisite approval or consent of any government
authority of any kind having jurisdiction over the exercise of
options shall not have been secured; and
(c) must be exercised prior to the date specified in Section 5(a)
and may be exercised only if at all times during the period
beginning with the date of the granting of the option and
ending on the date that is 365 days prior to the date of
exercise the Option Holder was an employee of either the
Company or a subsidiary of the Company; provided, however, if
the
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Option Holder's continuous employment is terminated for good
cause, the option will terminate as provided in Section 5(c).
8. Manner of Exercise. Subject to such administrative regulations as
the Committee may from time to time adopt, the Option Holder or, if applicable,
Option Holder's beneficiary shall, in order to exercise this option:
(a) give written notice to the Committee of the exercise price and
the number of shares which he will purchase and furnish an
undertaking to make payment of such exercise price in United
States dollars before issuance of such shares; or
(b) give written notice to the Committee of the exercise price and
the number of shares for which he is requesting approval from
the Committee to tender other shares of Common Stock in
exchange for option shares.
Any notice shall include an undertaking to furnish or execute such
documents as the Committee in its discretion shall deem necessary (i) to
evidence such exercise, in whole or in part, of the option evidenced by this
Agreement, (ii) to determine whether registration is then required under the
Securities Act of 1933, or any other law, as then in effect, and (iii) to
comply with or satisfy the requirements of the Securities Act of 1933, or any
other law, as then in effect.
In addition, if an exercise under paragraph (b) above is requested,
the notice shall include an undertaking to tender to the Company (i) promptly
after receipt of denial by the Committee of the paragraph (b) request, full
payment in United States dollars of the option exercise price for the shares
being purchased hereunder or (ii) promptly after receipt of approval by the
Committee of exercise of this option or portion thereof by payment of Common
Stock, full payment in Common Stock in exchange for the shares being purchased
hereunder. In addition, the Option Holder shall tender payment of the amount
that may be requested pursuant to Section 15 by the Company for the purpose of
satisfying its liability to withhold federal, state or local income or other
taxes incurred by reason of the exercise of this option.
The Committee shall advise the Option Holder or beneficiary in
writing, within ten business days after the first meeting of the Committee
following the date of exercise, whether the Committee approves the
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exchange of Common Stock for option stock being purchased. The Company must
receive full payment in United States dollars or the appropriate number of
shares of Common Stock, whichever applies, of the option exercise price within
five business days after the date of the Committee's notice, unless the
Committee extends the time of payment.
9. Non-Assignability. This option is not assignable or transferable
by the Option Holder except by will or by the laws of descent and distribution.
10. Rights of Shareholder. The Option Holder will have no rights as
a shareholder with respect to any shares covered by this option until the
issuance of a certificate or certificates to the Option Holder for the shares.
Except as otherwise provided in Section 11 hereof, no adjustment shall be made
for dividends or other rights for which the record date is prior to the
issuance of such certificate or certificates.
11. Capital Adjustments; Antidilution. The number of shares of
Common Stock covered by this option, and the option price thereof, shall be
subject to such adjustment as the Board deems appropriate to reflect any stock
dividend, stock split, share combination, exchange of shares, recapitalization,
merger, consolidation, separation, reorganization, liquidation or the like, of
or by the Company.
12. Change in Control of the Company. In the event (i) the
Company sells more than 51% of its assets, (ii) becomes a party to any merger,
consolidation or corporate reorganization, and as the result of which the
Company shall not be the surviving corporation, or (iii) any other person or
entity makes a tender or exchange offer for Common Stock of the Company whereby
such other person or entity would own more than 51% of the outstanding Common
Stock of the Company (the surviving corporation, purchaser, or tendering person
being collectively referred to as the "purchaser", and the applicable action
being referred to as the "transaction"), then the Board may, at its election,
(a) reach an agreement with the purchaser that the purchaser will assume the
obligation of the Company under the option; (b) reach an agreement with the
purchaser that the purchaser will convert the option into an option of at least
equal value, determined as of the date of the transaction, as to stock of the
purchaser; or (c) not later than twenty days prior to the effective
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date of such transaction, notify the Option Holder and afford to the Option
Holder a right for ten days after the date of such notice to exercise all or
any portion of the shares of Common Stock covered by this option that have not
been exercised and that the time for exercising such shares of Common Stock has
not expired pursuant to this Agreement. Within the ten-day period described in
clause (c) above, the Option Holder may exercise any portion of the shares
described in the preceding sentence as he may desire and deposit with the
Company the requisite cash to purchase in full the Common Stock thereby
exercised, in which case the Company shall, prior to the effective date of the
transaction, transfer to the Option Holder all shares of Common Stock thus
exercised, which shall be treated as owned by the Option Holder for purposes of
the transaction.
13. Law Governing. This Agreement is intended to be performed in the
State of Texas and shall be construed and enforced in accordance with and
governed by the laws of such State.
14. Date of Grant. The date of grant of this option is
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15. Withholding. It shall be a condition to the obligation of the
Company to issue or transfer shares of stock upon exercise of this option that
the Option Holder pay to the Company, upon its demand, such amount as may be
requested by the Company for the purpose of satisfying its liability to
withhold federal, state or local income or other taxes incurred by reason of
the exercise of this option. If the amount requested is not paid, the Company
may refuse to issue or transfer shares of stock upon exercise of this option.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Option Holder, to evidence his
consent and approval of all the terms hereof, has duly executed this Agreement,
as of the date specified in Section 14 hereof.
SNELLING AND SNELLING, INC.
By
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Option Holder
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