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EXHIBIT 10.11
SNELLING AND SNELLING, INC.
1996 STOCK OPTION PLAN
INTRODUCTION
On September 30, 1996, the Board of Directors of the Company adopted
the Snelling and Snelling, Inc. 1996 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 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
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limitation will not apply if the option price is at least 110% of the fair
market value of the stock at the time 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 550,000 shares of Common Stock, but 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 Common Stock or 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 Common Stock which 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 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 and
provisions as
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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 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
Common Stock on the date the option is granted. The Committee shall determine
the fair market value of the 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. No option may terminate later
than ten years from the date the option is granted. 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
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
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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 Common Stock
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
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
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 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.
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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 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 October 1, 2006. The Committee 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.
(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.
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(d) "Common Stock" means the Common Stock which the Company is
currently authorized to issue or may in the future be
authorized to issue (as long as the common stock varies from
that currently authorized, 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.
(g) "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 1996 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.
1996 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 Common Stock, $0.05 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 whole or in part at
any time on or after the date of grant. If an exercise covers a fractional
share, such exercise will be rounded off to the next highest share, except the
final exercise, which will be for the balance of the total optioned shares.
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 Company, 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 by the fair market value per share
of the Common Stock on the date of exercise, as determined by the Board of
Directors of the Company (the "Board").
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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.
(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 Employee's (i) commission of a felony or any other
criminal act which the Board considers materially damaging to
the reputation of the employer, (ii) fraud, (iii) dishonesty,
self-dealing, or embezzlement, (iv) violation of Employer's
published policies, (v) gross or intentional neglect of duty,
(vi) failure or unwillingness to perform substantially and
faithfully Employee's duties hereunder, or (vii) any act or
failure to act which undermines or besmirches the Employer's
business reputation; provided, however, in the event "good
cause" relates to items (iv) through (vi) above, then Employer
shall notify Employee of such cause, and, if such violation can
be cured, Employee 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
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
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disability, subject to the other terms of this Agreement, the Plan and
applicable laws, rules and regulations. For purposes of this Agreement, the
Company 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
(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 Board may from time to time adopt, the Option Holder or beneficiary
shall, in order to exercise this option:
(a) give written notice to the Board 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 Board of the exercise price and the
number of shares for which he is requesting approval from the
Board 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 Board 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 Board of the paragraph (b) request, full
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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
Board 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.
The Board shall advise the Option Holder or beneficiary in writing,
within ten business days after the first meeting of the Board following the
date of exercise, whether the Board 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 Board's notice, unless the Board 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
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"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 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, regardless of whether such Optioned Shares otherwise would then be
exercisable under the 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. Shareholder's Agreement. As a condition precedent to the
issuance of shares pursuant to the terms of this option, the Option Holder, or
his guardian or personal representative must execute a Shareholder Agreement in
the form of Exhibit "A" attached hereto and made a part hereof and hereby agree
to comply with all of the terms of such agreement. Concurrent with the
issuance of such shares, the Option Holder, his personal representative, or his
guardian shall execute such Shareholder Agreement and deliver such executed
agreement to the Company. Thereafter, the Board shall promptly cause the
officers of the Company to execute the Shareholder Agreement on behalf of the
Company. The Shareholder Agreement attached as Exhibit "A" may be modified
upon agreement of the Company and the Option Holder, but either party may
require the other to execute the form of agreement attached to this Agreement.
14. 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.
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15. Date of Grant. The date of grant of this option is
________________________, 1996.
16. Shareholder Approval. This option is subject to the approval of
the Plan, prior to_______________________ _____, 1997, by the shareholders of
the Company. Subject to such approval, this option is effective on the date of
grant specified in Section 15. 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 15 hereof.
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.
1996 Stock Option Plan (the "Plan") for key employees of Snelling and Snelling,
Inc. (the "Company") and its subsidiaries, the Company grants, as of the
effective date of the Company's initial public offering of its capital stock
(the "Grant Date"), to
[Name]
(the "Option Holder")
a nonqualified option to purchase from the Company such number of shares of
Class B Common Stock, $0.01 par value ("Class B Common Stock"), as shall be
equivalent to [Shares] shares of the Company's currently issued and outstanding
common stock, $0.05 par value ("Old Common Stock"), at a price per share that
shall equal the initial public offering price per share of the Class A Common
Stock of the Company, $0.01 per share ("Class A Common Stock"), offered in the
IPO (as hereinafter defined), and otherwise 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"). The grant of
this option is contingent upon the occurrence of an initial public offering of
the Company's new Class A Common Stock, par value $0.01, on or before December
31, 1997 (the "IPO").
2. The IPO. The Option Holder hereby acknowledges and agrees that
the Company is currently preparing for an initial public offering of its
capital stock, and that as part of these preparations, the Company intends to
effect a reclassification of its Old Common Stock. Pursuant to such
reclassification, the Old Common Stock will, automatically and without any
action on the part of the respective holders thereof, be reclassified on a
share for share basis into Class B Common Stock and a new class of common
stock, the Class A Common Stock will be created (collectively the Class A
Common Stock and the Class B Common Stock are
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referred to in this Agreement as the "New Common Stock"). The Company intends
to offer its Class A Common Stock in the IPO at a price per share to be
determined on or about the effective date of the IPO.
3. 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 180 days from the Grant Date.
Second installment. Up to an additional 20% of the total number of
optioned shares at any time on or after a date that is 365 days from
the Grant Date.
Third 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.
Fourth 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.
Fifth 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.
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.
4. Exercise of Option. The exercise of this option shall entitle
the Option Holder to purchase shares of Class B Common Stock of the Company. If
requested by the Option Holder and approved by the Company, the Option Holder
may exercise this option or any portion hereof by tendering shares of Class A
Common Stock or Class B Common Stock, in lieu of cash payment for the option
shares being purchased, with the number of shares tendered to be determined by
the fair market value per share of the Class A 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 Board of Directors of the
Company (the "Board").
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5. 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.
6. Term. This option will terminate at the first of the
following:
(a) 5 p.m. on the date that is ten years from the Grant Date.
(b) 5 p.m. on the date that is 365 days from the date of the
Option Holder's death or disability (as described in Section
6).
(c) 5 p.m. on the date that is 90 days from the date that the
Option's Holder's employment with the Company terminates for
any reason other than "good cause" (as hereinafter defined).
(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
employer, (ii) fraud, (iii) dishonesty, self-dealing, or
embezzlement, (iv) violation of Company's published policies,
(v) gross or intentional neglect of duty, (vi) failure or
unwillingness to perform substantially and faithfully Option
Holder's duties to the Company, (vii) breach of the terms of
this Agreement, or (viii) any act or failure to act which
undermines or besmirches the Company's business reputation;
provided, however, in the event "good cause" relates to items
(iv) through (vii) above, then 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.
7. 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 6 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
the date of his death or disability at any time prior to the earlier of the
dates specified in Sections 6(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
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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
Company shall determine the date of disability of the Option Holder.
8. Restrictions on Exercise. This option:
(a) may be exercised only with respect to full shares of Class B
Common Stock 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 6(a)
and may be exercised only if at all times during the period
beginning with the Grant Date 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 Option Holder's continuous
employment is terminated for "good cause", the option will
terminate as provided in Section 6(c).
9. Manner of Exercise. Subject to such administrative regulations
as the Board may from time to time adopt, the Option Holder or beneficiary
shall, in order to exercise this option:
(a) give written notice to the Board 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 Board of the exercise price and the
number of shares for which he is requesting approval from the
Board to tender other shares of New Common Stock in exchange
for option shares.
Any notice shall include an undertaking to furnish or execute such
documents as the Board 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 Board of the paragraph (b)
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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 Board of exercise of this option or portion thereof by payment of New
Common Stock, full payment in New 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 16 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 Board shall advise the Option Holder or beneficiary in writing, on
or before ten business days after the first meeting of the Board following the
date of exercise, whether the Board approves the exchange of New Common Stock
for option stock being purchased. The Company must receive full payment in
United States dollars or the appropriate number of shares of New Common Stock,
whichever applies, of the option exercise price within five business days after
the date of the Board's notice, unless the Board extends the time of payment.
10. Non-Assignability. This option is not assignable or
transferable by the Option Holder except by will or by the laws of descent and
distribution.
11. 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 12 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.
12. Capital Adjustments; Antidilution. The number of shares of New
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.
13. 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
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the Company shall not be the surviving corporation, or (iii) any other person
or entity makes a tender or exchange offer for the New Common Stock of the
Company whereby such other person or entity would own more than 51% of the
outstanding New 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 capital 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 Class B Common Stock
covered by this option that have not been exercised and that the time for
exercising such shares of Class B Common Stock has not expired pursuant to this
Agreement, regardless of whether such optioned shares otherwise would then be
exercisable under 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 Class B 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 Class B Common Stock
thus exercised, which shall be treated as owned by the Option Holder for
purposes of the transaction.
14. 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.
15. Date of Grant. The date of grant of this option is the
effective date of the initial public offering of the Class A Common Stock,
provided that such initial public offering occurs on or before December 31,
1997.
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16. 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.
17. Prior Agreement. This Agreement is in substitution of and
supercedes all prior stock option agreements between the Company and [Name].
All prior grants of stock options by the Company to [Name] and all stock option
agreements dated prior to the date of this agreement are null and void and
without effect.
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 below.
SNELLING AND SNELLING, INC.
By
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[Name] Option Holder
Date:
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