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EXHIBIT 10.12
SNELLING AND SNELLING, INC.
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
INTRODUCTION
As of July 3, 1997, the Board of Directors of Snelling and Snelling,
Inc. (the "Company") adopted the following 1997 Non-Employee Directors Stock
Option Plan:
1. Purpose. The purpose of the Plan is to provide Non-Employee
Directors of the Company with a proprietary interest in the Company through the
granting of options which will:
(a) increase the interest of the Non-Employee Directors in the
Company's welfare;
(b) furnish an incentive to the Non-Employee Directors to continue
their services for the Company; and
(c) provide a means through which the Company may attract able
persons to serve on the Board.
2. Administration. The Plan will be administered by the Board.
3. Participants. All Non-Employee Directors of the Company are to
be granted options under the Plan, and upon such grant will become participants
in the Plan.
4. Shares Subject to Plan. Options may not be granted under the
Plan for more than 150,000 shares of Class A Common Stock of the Company, but
this number shall be adjusted to reflect, if deemed appropriate by the Board,
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.
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5. Allotment of Shares. Subject to approval by the Company's
shareholders pursuant to Section 5(d), grants of options under the Plan shall
be as described in this Section 5:
(a) Each Non-Employee Director of the Company, elected after the
effective date of the Company's initial public offering on
Form S-1 of its Class A Common Stock (the "Effective Date") at
an annual meeting of shareholders, who has not previously
served as a director of the Company shall be granted an
option, effective as of the Grant Date, to purchase 5,000
shares of Class A Common Stock of the Company.
(b) Each Non-Employee Director of the Company appointed after the
Effective Date to fill a vacancy in the Board who has not
previously served as a director of the Company shall be
granted an option, effective as of the Grant Date, to purchase
5,000 shares of Class A Common Stock of the Company.
(c) Each other Non-Employee Director of the Company elected at, or
continuing to serve following, each annual shareholders
meeting, commencing with the 1998 annual meeting, shall be
granted an option, effective as of the Grant Date, to purchase
5,000 shares of Class A Common Stock of the Company.
(d) The Plan shall be submitted to the Company's shareholders for
approval. The Board 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 after
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.
6. Grant of Options. All options under the Plan shall be
automatically granted as provided in Section 5. The grant of options shall be
evidenced by stock option agreements containing such terms and
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provisions as are approved by the Board, but not inconsistent with the Plan.
The Company shall execute stock option agreements upon instructions from the
Board.
7. Option Price. The exercise price of each share of Class A
Common Stock covered by an option under the Plan shall be equal to the Fair
Market Value of a share of Class A Common Stock on the Grant Date.
8. Option Period. The Option Period will begin on the Grant Date
and will terminate at the first of the following:
(a) 5 p.m. on the fifth anniversary of the Grant Date.
(b) 5 p.m. on the date three months following the date of the
Non-Employee Director's death or disability.
(c) 5 p.m. on the date thirty (30) days following the date the
Non-Employee Director ceases to be a director of the Company
for any reason other than death or disability.
9. Rights in Event of Death or Disability. If a participant dies
or becomes disabled 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 may be exercised to the extent the
participant 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 Section
8(a) or (b) hereof by (i) 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 in the event of the participant's death,
or (ii) the participant or his personal representative in the event of the
participant's disability, subject to the other terms of the Plan and applicable
laws, rules and regulations. For purposes of the Plan, the Board shall
determine the date of disability of a participant.
10. Payment. Full payment for shares purchased upon exercising an
option shall be made in cash or by check or by tendering shares of Class A
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
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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. In addition, the participant shall tender payment of the 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 an option.
11. Vesting.
(a) Each option will become fully vested and exercisable on the
date which is six months after the Grant Date.
(b) 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.
12. 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 thereof, and the number of shares to be granted
pursuant to Section 5 and the option price thereof, shall be adjusted to
reflect, as deemed appropriate by the Board, any stock dividend, stock split,
share combination, exchange of shares, recapitalization, merger, consolidation,
separation, reorganization, liquidation or the like, of or by the Company.
If (a) the Company shall be party to a merger or consolidation in
which (i) the Company is not the surviving entity, or (ii) the Company survives
only as a subsidiary of an entity other than a previously-owned subsidiary of
the Company, or (iii) the Company survives but the Common Stock is exchanged or
converted into any securities or property, (b) the Company sells, leases or
exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any person or entity (other than a wholly-owned subsidiary of the
Company) or (c) the Company is to be dissolved and liquidated (each such event
is referred to herein as a "Corporate Change"), then effective as of the
earlier of (A) the date of approval by the shareholders of the Company of such
Corporate Change or (B) the date of such Corporate Change, (1) in the event of
any such
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merger or consolidation and upon any exercise of any outstanding option, the
participant shall be entitled to purchase, in lieu of the number of shares of
Class A Common Stock as to which such option shall then be exercisable, the
number and class of shares of stock or other securities or property to which
the participant would have been entitled pursuant to the terms of the agreement
of merger or consolidation if, immediately prior to such merger or
consolidation the participant had been the holder of record of the number of
shares of Class A Common Stock as to which such option is then exercisable, and
(2) in the event of any such sale, lease or exchange of assets or dissolution,
each participant shall surrender his options to the Company and the Company
shall cancel such options and pay to each participant an amount of cash per
share equal to the excess of the per share price offered to shareholders of the
Company in any such sale, lease or exchange of assets or dissolution
transaction for the shares subject to such options over the exercise price(s)
under such options for such shares.
13. Non-Assignability. Options may not be transferred other than
by will or by the laws of descent and distribution. Except as otherwise
provided in the Plan, during a participant's lifetime, options granted to a
participant may be exercised only by the participant.
14. Interpretation. The Board 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
Board may rescind and amend its rules and regulations.
15. 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
benefits accruing to participants under the Plan, (b) increase the number of
securities that may be issued under the Plan, or (c) materially modify the
requirements of eligibility for participation in the Plan, must be approved by
the shareholders of the Company. In addition, the Plan shall not be amended
more than once every six months, other than to comport with changes in the
Internal Revenue Code
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of 1986, as amended, the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.
16. Effect of Plan. Neither the adoption of the Plan nor any
action of the Board shall be deemed to give any director any right to be
granted an option to purchase Class A Common Stock of the Company or any other
rights except as may be evidenced by the stock option agreement, or any
amendment thereto, duly authorized by the Board and executed on behalf of the
Company, and then only to the extent and on the terms and conditions expressly
set forth therein.
17. Term. Unless sooner terminated by action of the Board, the
Plan will terminate on the tenth anniversary of the Effective Date. 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.
18. Definitions. For the purposes of the Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:
(a) "Board" means the board of directors of the Company or any
committee of the Board appointed by the Board to administer
the Plan or any portion of the Plan.
(b) "Class A Common Stock" means the Class A Common Stock, par
value $0.01 per share, of the Company, which as of the date
hereof, the Board of Directors of the Company has authorized
and approved and which, subject to shareholder approval, the
Company will be authorized to issue.
(c) "Fair Market Value" means, as of any specified date, the
average between the high and low sales price of the Common
Stock on any national securities exchange. If the Common Stock
is not then listed on any national securities exchange but is
traded over the counter at the time a determination of its
Fair Market Value is required to be made hereunder, its Fair
Market Value shall be deemed to be equal to the average
between the reported high and low sales prices of Common Stock
on the specified date. If the Common Stock is not publicly
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traded at the time a determination of its value is required to
be made hereunder, the determination of its Fair Market Value
shall be made by the Board in such manner as it deems
appropriate.
(d) "Grant Date" means, with respect to an option, the date of the
annual shareholders meeting at which the Non-Employee Director
is elected or the date of the Board meeting at which the
Non-Employee Director is appointed to fill a vacancy in the
Board, whichever is applicable, and, as a consequence thereof,
is granted that option.
(e) "Non-Employee Director" means a director of the Company who
(i) is not an employee of the Company or of any of its
subsidiaries, and (ii) is not serving on the Board pursuant to
a contractual obligation of the Company or at the request of a
shareholder of the Company.
(f) "Option Period" means the period during which an option may be
exercised.
(g) "Plan" means this 1997 Non-Employee Directors Stock Option
Plan, as amended from time to time.
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SNELLING AND SNELLING, INC.
1997 NON-EMPLOYEE DIRECTORS
NONQUALIFIED STOCK OPTION AGREEMENT
1. Grant of Option. Pursuant to the Snelling and Snelling, Inc.
1997 Non-Employee Directors Stock Option Plan (the "Plan") for non-employee
directors of Snelling and Snelling, Inc. (the "Company"), the Company grants to
----------------------------------------
(the "Option Holder")
an option to purchase from the Company a total of _________ shares of Class A
Common Stock, $0.01 par value, of the Company at $______ per share (being at
least the fair market value per share of the Class A 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.
2. Time of Exercise. Except only as specifically provided
elsewhere in this Agreement, this option shall be fully vested and exercisable
in whole or in part, at any time after the date that is six months after the
date of grant specified in Section 13 of this Agreement. No fractional shares
will be issued; 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. In no event may
this option be exercised in whole or in part after its date of termination
specified in Section 5 hereof.
3. Exercise of Option. The exercise of this option shall entitle
the Option Holder to purchase shares of Class A Common Stock of the Company. If
elected by the Option Holder, the Option Holder may
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exercise this option or any portion hereof by tendering shares of Class A
Common Stock, or Class B Common Stock, $0.01 par value, 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 defined in the Plan.
4. Subject to Plan. This option and the grant and exercise
thereof are subject to the terms and conditions of the Plan, which is
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 the fifth anniversary of the date of grant specified
in Section 13 of this Agreement.
(b) 5 p.m. on the date 180 days following the date of the Option
Holder's death or disability.
(c) 5 p.m. on the date 90 days following the date the Option
Holder ceases to be a director of the Company for any reason
other than death or disability.
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 prior to the termination date specified in Section 5
hereof without having exercised the option as to all of the shares covered
thereby, 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 Section 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 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. The option evidenced by this
Agreement:
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(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
governmental 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 90 days prior to the date of exercise the Option
Holder was a director of the Company; provided, if the Option
Holder's continuous directorship is terminated by death or
disability, or if the Option Holder dies within said 90-day
period, the option may be exercised in accordance with Section
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8. Manner of Exercise. Subject to such administrative regulations
as the Board of Directors of the Company may from time to time adopt, the
Option Holder or beneficiary shall, in order to exercise this option
(a) give written notice to the Company of the exercise price and the
number of shares which he or she 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 Company of the exercise price and the
number of shares for which he or she is electing to tender other
shares of Class A Common Stock or Class B Common Stock, par
value $0.01 per share, in exchange for option shares.
Any notice shall include an undertaking to furnish or execute such
documents as the Company 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, the Option Holder shall tender payment of the
amount, if any, as may be requested pursuant to Section 14 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.
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.
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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. The number of shares of Class A Common
Stock covered by this option, and the option price thereof, shall be subject to
such adjustment as the Board of Directors of the Company 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.
If (a) the Company shall be party to a merger or consolidation in which
(i) the Company is not the surviving entity, or (ii) the Company survives only
as a subsidiary of an entity other than a previously-owned subsidiary of the
Company, or (iii) the Company survives but the Common Stock is exchanged or
converted into any securities or property, (b) the Company sells, leases or
exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any person or entity (other than a wholly-owned subsidiary of the
Company) or (c) the Company is to be dissolved and liquidated (each such event
is referred to herein as a "Corporate Change"), then effective as of the
earlier of (A) the date of approval by the shareholders of the Company of such
Corporate Change or (B) the date of such Corporate Change, (1) in the event of
any such merger or consolidation and upon any exercise of any outstanding
option, the Option Holder shall be entitled to purchase, in lieu of the number
of shares of Class A Common Stock as to which such option shall then be
exercisable, the number and class of shares of stock or other securities or
property to which the Option Holder would have been entitled pursuant to the
terms of the agreement of merger or consolidation if, immediately prior to such
merger or consolidation the Option Holder had been the holder of record of the
number of shares of Class A Common Stock as to which such option is then
exercisable, and (2) in the event of any such sale, lease or exchange of assets
or dissolution, each Option Holder shall surrender his options
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to the Company and the Company shall cancel such options and pay to each Option
Holder an amount of cash per share equal to the excess of the per share price
offered to shareholders of the Company in any such sale, lease or exchange of
assets or dissolution transaction for the shares subject to such options over
the exercise price(s) under such options for such shares.
12. 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.
13. Date of Grant. The date of grant of this option is
________________, 199__.
14. 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, if any, 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.
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 13 hereof.
SNELLING AND SNELLING, INC.
By:
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Its:
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, Option Holder
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