1
Exhibit 10.24
STAFFMARK, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
SECTION 1. PURPOSE. The Plan (i) authorizes the Committee to provide to
Employees and Consultants of the Corporation and its Subsidiaries, who are in a
position to contribute materially to the long-term success of the Corporation,
with options to acquire Common Stock, par value $.01 per share, of the
Corporation, and (ii) provides for the automatic grant of options to
Non-Employee Directors of the Corporation in accordance with the terms specified
herein. The Corporation believes that this incentive program will cause those
persons to increase their interest in the Corporation's welfare, and aid in
attracting and retaining Employees, Consultants and Directors of outstanding
ability.
SECTION 2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth in
this Section:
(a) "Board" shall mean the Board of Directors of the
Corporation.
(b) A "Change in Control" shall be deemed to have
occurred if:
(i) any person, other than the Corporation or an
employee benefit plan of the Corporation, acquires directly or
indirectly the Beneficial Ownership of any voting security of
the Corporation and immediately after such acquisition such
Person is, directly or indirectly, the Beneficial Owner of
voting securities representing 50% or more of the total voting
power of the then-outstanding voting securities of the
Corporation;
(ii) the individuals (A) who, as of the closing date
of the Initial Public Offering, constitute the Board
(the"Original Directors") or (B) who thereafter are elected to
the Board and whose election, or nomination for election, to
the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors
becoming "Additional Original Directors" immediately following
their election) or (C) who are elected to the Board and whose
election, or nomination for election, to the Board was
approved by a vote of at least two-thirds (2/3) of the
Original Directors and Additional Original Directors then
still in office (such directors also becoming "Additional
Original Directors" immediately following their election)(such
individuals being the "Continuing Directors"), cease for any
reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Corporation shall
approve a merger, consolidation, recapitalization, or
reorganization of the Corporation, a reverse stock split of
outstanding voting securities, or consummation of any such
transaction if stockholder approval is not sought or obtained,
other than any such transaction which would result in at least
75% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately
after such transaction being Beneficially Owned by at least
75% of the holders of outstanding voting securities of the
Corporation immediately prior to the transaction, with the
voting power of each such continuing holder relative to other
such continuing holders not substantially altered in the
transaction; or
(iv) the stockholders of the Corporation shall
approve a plan of complete liquidation of the Corporation or
an agreement for the sale or disposition by the Corporation of
all or a substantial portion of the Corporation's assets (i.e.
50% or more of the total assets of the Corporation).
(c) "Code" shall mean the Internal Revenue Code of 1986
as it may be amended from time to time.
1
2
(d) "Committee" shall mean the Board, or any committee of two
or more Directors that may be designated by the Board to administer the
Plan. The Committee may be comprised of "non-employee directors" within
the meaning of Rule 16b-3 under the Exchange Act and "outside
directors" under section 162(m) of the Code.
(e) "Consultant" shall mean (i) any person who is engaged to
perform services for the Corporation or its Subsidiaries, other than as
an Employee or Director, or (ii) any person who has agreed to become a
consultant within the meaning of clause (i).
(f) "Control Person" shall mean any person who, as of the date
of grant of an Option, owns (within the meaning of Section 422(b)(6) of
the Code) stock possessing more than ten percent (10%) of the total
combined voting power or value of all classes of stock of the
Corporation or of any Parent or "subsidiary corporation" (within the
meaning of Section 424(f) of the Code).
(g) "Corporation" shall mean StaffMark, Inc., a Delaware
corporation.
(h) "Director" shall mean any member of the Board.
(i) "Employee" shall mean (i) any full-time employee of the
Corporation or its Subsidiaries (including Directors who are otherwise
employed on a full-time basis by the Corporation or its Subsidiaries),
or (ii) any person who has agreed to become an employee within the
meaning of clause (i).
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934 as it may be amended from time to time.
(k) "Fair Market Value" of the Stock on a given date shall be
based upon: (i) if the Stock is listed on a national securities
exchange or quoted in an interdealer quotation system, the last sales
price or, if unavailable, the average of the closing bid and asked
prices per share of the Stock on such date (or, if there was no trading
or quotation in the Stock on such date, on the next preceding date on
which there was trading or quotation) as provided by one of such
organizations; or (ii) if the Stock is not listed on a national
securities exchange or quoted in an interdealer quotation system, as
determined by the Board in good faith in its sole discretion, provided,
however, that the "fair market value" of Stock on the date on which
shares of Stock are first issued and sold pursuant to a registration
statement filed with and declared effective by the Securities and
Exchange Commission shall be the Initial Public Offering price of the
shares so issued and sold, as set forth in the first prospectus used in
such offering.
(l) "Grantee" shall mean a person granted an Option under the
Plan.
(m) "Initial Public Offering" shall mean an initial public
offering of shares of Stock in a firm commitment underwriting
registered with the Securities and Exchange Commission in compliance
with the provisions of the 1933 Act.
(n) "ISO" shall mean an Option granted pursuant to the Plan to
purchase shares of Stock and intended to qualify as an incentive stock
option under Section 422 of the Code, as now or hereafter constituted.
(o) "1933 Act" shall mean the Securities Act of 1933, as
amended.
(p) "Non-Employee Director" shall mean a Director of the
Corporation who is not an Employee, and who was not an Employee at any
time during the prior one year period.
(q) "NQSO" shall mean an Option granted pursuant to the Plan
to purchase shares of the Stock that are not ISOs.
(r) "Options" shall refer collectively to NQSOs and ISOs
issued under and subject to the Plan.
2
3
(s) "Parent" shall mean any parent corporation as defined in
Section 424(e) of the Code.
(t) "Plan" shall mean this Amended and Restated 1996 Stock
Option Plan as set forth herein and as amended from time to time.
(u) "Stock" shall mean shares of the common stock of the
Corporation.
(v) "Stock Option Agreement" shall mean a written agreement
between the Corporation and the Grantee, or a certificate accepted by
the Grantee, evidencing the grant of an Option hereunder and containing
such terms and conditions, not inconsistent with the Plan, as the
Committee shall approve.
(w) "Subsidiary" shall mean (i) any company (whether a
corporation, partnership, joint venture or other entity) in which the
Company owns, directly or indirectly, a majority of the shares of
capital stock or other equity interest, or (ii) any entity which the
Committee reasonably expects to become a subsidiary within the meaning
of clause (i).
SECTION 3. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to adjustment as
described in section 10, the total amount of Stock that may be subject to
outstanding Options, determined immediately after the grant of any Option, shall
not exceed the greater of 650,000 shares or 12% percent of the total number of
shares of Stock outstanding. Notwithstanding the foregoing, subject to
adjustment as described in section 10, the number of shares that may be
delivered upon exercise of ISOs shall not exceed 650,000. For purposes of the
foregoing limits, shares subject to Options shall not be deemed delivered if
such Options are forfeited, expire or otherwise terminate without delivery of
shares to the Grantee. Any shares of Stock delivered pursuant to an Option may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.
SECTION 4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan, the Committee shall
have the authority to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
Stock Option Agreements thereunder and to make all other determinations
necessary or advisable for the administration of the Plan. Any controversy or
claim arising out of or related to this Plan or the Options granted thereunder
shall be determined unilaterally by, and at the sole discretion of, the
Committee. Any action of the Committee with respect to the Plan shall be final,
conclusive, and binding on all persons, including the Corporation, Subsidiaries
of the Corporation, Grantees, and any person claiming any rights under the Plan
from or through any Grantee and stockholders. The express grant of any specific
power to the Committee, and the taking of any action by the Committee, shall not
be construed as limiting any power or authority of the Committee. The Committee
may delegate to officers or managers of the Corporation or any Subsidiary the
authority, subject to such terms as the Committee shall determine, to perform
administrative functions to the extent permitted under Rule 16b-3, if
applicable, Code section 162(m), and other applicable law.
SECTION 5. TYPES OF OPTIONS. Options granted under the Plan may be of two types:
ISOs or NQSOs. The Committee shall have the authority and discretion to grant to
an eligible Employee either ISOs, NQSOs or both, but shall clearly designate the
nature of each Option at the time of grant in the Stock Option Agreement.
SECTION 6. GRANT OF OPTIONS TO EMPLOYEES AND CONSULTANTS.
(a) Employees and Consultants of the Corporation and its
Subsidiaries shall be eligible to receive Options under the Plan.
Grantees who are not employees of the Corporation or a "subsidiary
corporation" (within the meaning of Section 424(f) of the Code) on the
date an Option is granted shall only receive NQSOs.
(b) The exercise price per share of Stock subject to an Option
granted to an Employee or Consultant shall be determined by the
Committee and specified in the Stock Option Agreement, provided,
however, that the exercise price of each share subject to an Option
shall be not less than 100%, or, in the case of an ISO granted to a
Control Person, 110% of the Fair Market Value of a share of the Stock
on the date such Option is granted.
3
4
(c) The term of each Option granted to an Employee or
Consultant shall be determined by the Committee and specified in a
Stock Option Agreement, provided that no Option shall be exercisable
more than ten years from the date such Option is granted, and provided
further that no ISO granted to a Control Person shall be exercisable
more than five years from the date of the Option grant.
(d) The Committee shall determine and designate from time to
time Employees or Consultants who are to be granted Options, and shall
specify in the Stock Option Agreement the nature of each Option granted
and the number of shares of Stock subject to each such Option,
provided, however, that in any calendar year, no Employee or Consultant
may be granted an Option to purchase more than 500,000 shares of Stock
(determined without regard to when such Option is exercisable), subject
to adjustment pursuant to Section 10.
(e) Notwithstanding any other provisions hereof, the aggregate
Fair Market Value (determined at the time the ISO is granted) of the
Stock with respect to which ISOs are exercisable for the first time by
any Employee during any calendar year under all plans of the
Corporation and any Parent or "subsidiary corporation" (within the
meaning of Section 424(f) of the Code) shall not exceed $100,000. To
the extent the limitation set forth in the preceding sentence is
exceeded, the Options with respect to such excess shall be treated as
NQSOs.
(f) The Committee shall determine whether any Option granted
to an Employee or Consultant shall become exercisable in one or more
installments and specify the installment dates in the Stock Option
Agreement. The Committee may also specify in the Stock Option Agreement
such other provisions, not inconsistent with the terms of this Plan, as
it may deem desirable, including such provisions as it may deem
necessary to qualify any ISO under the provisions of Section 422 of the
Code. Unless otherwise determined by the Committee and specified in the
Stock Option Agreement, all Options shall immediately become
exercisable upon a Change in Control.
(g) All Options granted hereunder prior to the Initial Public
Offering shall be conditional upon, and for all purposes hereunder,
deemed granted upon, the Initial Public Offering.
(h) The Committee may, at any time, grant new or additional
options to any eligible Employee or Consultant who has previously
received Options under this Plan, or options under other plans, whether
such prior Options or other options are still outstanding, have been
exercised previously in whole or in part, or have been canceled. The
exercise price of such new or additional Options may be established by
the Committee, subject to Section 6(b) hereof, without regard to such
previously granted Options or other options.
SECTION 7. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS.
(a) Non-Employee Directors of the Corporation shall be
eligible to receive Options under the Plan only pursuant to the
provisions of this Section 7. Each individual who agrees to become a
Non-Employee Director prior to the consummation of the Corporation's
Initial Public Offering shall receive, without the exercise of the
discretion of any person, an NQSO under the Plan relating to the
purchase of 10,000 shares of Stock at an exercise price per share equal
to the Initial Public Offering Price per share. Such Option grant shall
be conditional upon, and for all purposes hereunder, deemed granted
upon, the Initial Public Offering. Thereafter, on the day after the
first annual meeting of stockholders next following the date of an
Initial Public Offering, and the day after each subsequent annual
meeting, each person who is a continuing Non-Employee Director on any
such date shall receive, without the exercise of the discretion of any
person, an NQSO under the Plan relating to the purchase of 2,000 shares
of Stock, and each person who is a new, first-time Non-Employee
Director on any such date shall receive, without the exercise of the
discretion of any person, an NQSO under the Plan relating to the
purchase of 10,000 shares of Stock. In the event that there are not
sufficient shares available under this Plan to allow for the grant to
each Non-Employee Director of an NQSO for the number of shares provided
herein, each Non-Employee Director shall receive an NQSO for his pro
rata share of the total number of shares of Stock available under the
Plan.
4
5
(b) Except as set forth in Section 7(a), the exercise price of
each share of Stock subject to an Option granted to a Non-Employee
Director shall equal the Fair Market Value of a share of Stock on the
date such Option is granted.
(c) Each Option granted to a Non-Employee Director shall
become exercisable in equal annual installments on the date of grant
and on each of the first two anniversaries of the date of grant, and
shall have a term of five years from the date of grant. Notwithstanding
the exercise period of any Option granted to a Non-Employee Director,
all such Options shall immediately become exercisable upon a Change in
Control.
SECTION 8. EXERCISE OF OPTIONS.
(a) A Grantee or other permitted holder shall exercise an
Option by delivery of written notice to the Corporation setting forth
the number of shares with respect to which the Option is to be
exercised, together with cash, certified check, bank draft, wire
transfer, or postal or express money order payable to the order of the
Corporation for an amount equal to the Option price of such shares and
any income tax which may be required to be withheld as determined by
the Committee pursuant to Section 12. The Committee may, in its sole
discretion, permit a Grantee to pay all or a portion of the exercise
price by delivery of Stock or other property (including notes or other
contractual obligations of Grantees to make payment on a deferred
basis, such as through "cashless exercise" arrangements, to the extent
permitted by applicable law), and the methods by which Stock will be
delivered or deemed to be delivered to Grantees.
(b) Except as provided pursuant to section 9(a), no Option
granted to an Employee or Consultant shall be exercised unless at the
time of such exercise the Grantee is then: (i) an employee of the
Company or a Subsidiary (determined with reference to Section 2(w)(i)
only); or (ii) a Consultant (determined with reference to Section
2(e)(i) only) of the Corporation or a Subsidiary (determined with
reference to Section 2(w)(i) only).
(c) Except as provided in Section 9(a), no Option granted to a
Non-Employee Director shall be exercised unless at the time of such
exercise the Grantee is then a Non-Employee Director.
SECTION 9. EXERCISE OF OPTIONS UPON TERMINATION.
(a) Unless otherwise determined by the Committee, upon
termination of a Grantee's employment with the Corporation and its
Subsidiaries, such Grantee may exercise any Options during the three
month period following such termination of employment, but only to the
extent such Option was exercisable immediately prior to such
termination of employment. Notwithstanding the foregoing, if the
Committee determines that such termination is for cause, all Options
held by the Grantee shall immediately terminate. In addition, all
Options granted on the basis of clause (ii) of Section 2(e), Section
2(i) or Section 2(w) shall immediately terminate if the Committee
determines, in its sole discretion, that the Consultant, Employee, or
Subsidiary, as the case may be, will not become a Consultant, Employee
or Subsidiary within the meaning of clause (i) of such Sections.
(b) Unless otherwise determined by the Committee and specified
in the Stock Option Agreement, in no event shall any Option be
exercisable for more than the maximum number of shares that the Grantee
was entitled to purchase at the date of termination of the relationship
with the Corporation and its Subsidiaries.
(c) The sale of any Subsidiary shall be treated as a
termination of employment with respect to any Grantee employed by such
Subsidiary.
(d) Subject to the foregoing, in the event of death, Options
may be exercised by a Grantee's legal representative. Options
transferred pursuant to Section 14 may also be exercised by a permitted
holder.
5
6
SECTION 10. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event any dividend
or other distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event affects the Stock such that an adjustment
is appropriate in order to prevent dilution or enlargement of the rights of
Grantees under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of shares of Stock
deemed to be available thereafter for grants of Options under Section 3, (ii)
the number and kind of shares of Stock that may be delivered or deliverable in
respect of outstanding Options, (iii) the number of shares with respect to which
Options may be granted to a given Grantee in the specified period as set forth
in Section 6(d), and (iv) the exercise price or, if deemed appropriate, the
Committee may make provision for a cash payment with respect to any conditions
of, and the criteria included in, Options (including, without limitation, cash
payments in exchange for an Option or substitution of Options using stock of a
successor or other entity) in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence)
affecting the Corporation or any Subsidiary or the financial statements of the
Corporation or any Subsidiary, or in response to changes in applicable laws,
regulations, or accounting principles.
SECTION 11. RESTRICTIONS ON ISSUING SHARES. The Corporation shall not be
obligated to deliver Stock upon the exercise or settlement of any Options or
take other actions under the Plan until the Corporation shall have determined
that applicable federal and state laws, rules, and regulations have been
complied with and such approvals of any regulatory or governmental agency have
been obtained and contractual obligations to which the Option may be subject
have been satisfied. The Corporation, in its discretion, may postpone the
issuance or delivery of Stock under any Option until completion of such stock
exchange listing or registration or qualification of such Stock or other
required action under any federal or state law, rule, or regulation as the
Corporation may consider appropriate, and may require any Grantee to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Stock under the Plan.
SECTION 12. TAX WITHHOLDING. To the extent required by applicable federal,
state, local or foreign law, a Grantee shall make arrangements satisfactory to
the Company for the satisfaction of any withholding tax obligations that arise
by reason of an Option exercise or any sale of shares. The Company shall not be
required to issue shares until such obligations are satisfied. The Committee may
permit these obligations to be satisfied by having the Company withhold a
portion of the shares of the stock that otherwise would be issued to him or her
upon the exercise of the Option, or to the extent permitted, by tendering shares
previously acquired. The Committee may also, upon the request of a Grantee
desiring to exercise an Option, direct the Company to lend the Grantee an amount
necessary to pay any federal and state income tax withholding requirements in
connection with such exercise, which loan may be forgiven over a three-year
period subject to continued service with the Company.
SECTION 13. LOANS TO GRANTEES. The Committee may, upon the request of a Grantee,
direct the Company to lend the Grantee an amount necessary to satisfy the
exercise price of any Option. Such loan may be forgiven over a three-year period
subject to continued service with the Company.
SECTION 14. TRANSFERABILITY.
(a) Except as provided below, no Option shall be subject to
anticipation, sale, assignment, pledge, encumbrance, charge or transfer
except by will or the laws of descent and distribution, and an Option
shall be exercisable during the Grantee's lifetime only by the Grantee.
(b) Notwithstanding the foregoing, the Committee may provide,
in a Stock Option Agreement, that the Grantee may transfer NQSOs to
family members or other persons or entities according to such terms as
the Committee may determine; provided that the Grantee receives no
consideration for the transfer of the NQSO and the transferred NQSO
shall continue to be subject to the same terms and conditions as were
applicable to the NQSO immediately before the transfer.
SECTION 15. GENERAL PROVISIONS.
6
7
(a) Each Option shall be evidenced by a Stock Option
Agreement. The terms and provisions of such Stock Option Agreements may
vary among Grantees and among different Options granted to the same
Grantee.
(b) The grant of an Option in any year shall not give the
Grantee any right to similar grants in future years, any right to
continue such Grantee's employment relationship with the Corporation or
its Subsidiaries, or, until such Option is exercised and share
certificates are issued, any rights as a stockholder of the
Corporation. All Grantees shall remain subject to discharge to the same
extent as if the Plan were not in effect.
(c) No Grantee, and no beneficiary or other persons claiming
under or through the Grantee shall have any right, title or interest by
reason of any Option to any particular assets of the Corporation or its
Subsidiaries, or any shares of Stock allocated or reserved for the
purposes of the Plan or subject to any Option except as set forth
herein. The Corporation shall not be required to establish any fund or
make any other segregation of assets to assure the payment of any
Option.
(d) The issuance of shares of Stock to Grantees, their legal
representatives or other permitted holders shall be subject to any
applicable taxes and other laws or regulations of the United States or
of any state having jurisdiction thereof.
SECTION 16. AMENDMENT OR TERMINATION. The Board may, at any time, alter, amend,
suspend, discontinue or terminate this Plan; provided, however, that no such
action shall adversely affect the rights of Grantees to Options previously
granted hereunder and, provided further, however, that any shareholder approval
necessary or desirable in order to comply with Section 162(m) or Section 422 of
the Code (or other applicable law or regulation) shall be obtained in the manner
required therein. The Committee may waive any conditions or rights under, or
amend, alter, suspend, discontinue, or terminate, any Option theretofore granted
and any Stock Option Agreement relating thereto; provided, however, that,
without the consent of an affected Grantee, no such action may materially impair
the rights of such Grantee under such Option.
SECTION 17. EFFECTIVE DATE OF PLAN. This Plan is effective upon its adoption by
the Board and shall continue in effect until terminated by the Board. No ISO may
be granted more than ten years after the adoption of the Plan by the Board or
approval of the Plan by the stockholders, whichever is earlier.
- - - - - - - - - - - - - -
This Plan was amended and restated on March 12, 1998.
7