2006 STOCK INCENTIVE PLAN
1. ESTABLISHMENT, EFFECTIVE DATE AND TERM
Spherion Corporation, a Delaware corporation, hereby establishes the Spherion Corporation 2006Stock Incentive Plan. The Effective Date of the Plan shall be the July 1, 2006; provided,however, no Award may be granted unless and until the Plan has been approved by Spherionsshareholders. Unless earlier terminated pursuant to Section 15(k) hereof, the Plan shall terminateon the tenth anniversary of the Effective Date.
The purpose of the Plan is to advance the interests of the Company by allowing the Company toattract, retain, reward and motivate Eligible Individuals by providing them with an opportunity toacquire or increase a proprietary interest in Spherion and incentives to expend maximum effort forthe growth and success of the Company so as to strengthen the mutuality of the interests betweenthe Eligible Individuals and the stockholders of Spherion.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) Award means any Common Stock, Option, Performance Share, Performance Unit, RestrictedStock, Stock Appreciation Right or any other award granted pursuant to the Plan.
(b) Award Agreement means a written agreement entered into by Spherion and a Participantsetting forth the terms and conditions of the grant of an Award to such Participant.
(c) Board means the board of directors of Spherion.
(d) Cause means, with respect to a termination of employment or service with the Company, atermination of employment or service due to a Participants dishonesty, fraud, insubordination,willful misconduct, refusal to perform services (for any reason other than illness or incapacity)or materially unsatisfactory performance of the Participants duties for the Company; provided,however, that if the Participant and the Company have entered into an employment agreement orconsulting agreement which defines the term Cause, the term Cause shall be defined in accordancewith such agreement with respect to any Award granted to the Participant on or after the effectivedate of the respective employment or consulting agreement. The Committee shall determine in itssole and absolute discretion whether Cause exists for purposes of the Plan.
(e) Change in Control shall have the meaning ascribed to the phrase change in the ownershipor effective control of a corporation or in the ownership of a substantial portion of the assets ofa corporation under Treasury Department Proposed Regulation 1.409A-3(g)(5), as revised from timeto time in either subsequent proposed or final regulations, and in the event that such regulationsare withdrawn or such phrase (or a substantially similar phrase) ceases to be defined, asdetermined by the Committee.
(f) Change in Control Price means the price per share of Common Stock paid in anytransaction related to a Change in Control of Spherion.
(g) Code means the Internal Revenue Code of 1986, as amended, and the regulationspromulgated thereunder.
(h) Committee means a committee or sub-committee of the Board consisting of two or moremembers of the Board, none of whom shall be an officer or other salaried employee of the Company,and each of whom shall qualify in all respects as a non-employee director as defined in Rule16b-3 under the Exchange Act, and as an outside director for purposes of Code Section 162(m). Ifno Committee exists, the functions of the Committee will be exercised by the Board; provided,however, that a Committee shall be created prior to the grant of Awards to a Covered Employee andthat grants of Awards to a Covered Employee shall be made only by such Committee. Notwithstandingthe foregoing, with respect to the grant of Awards to non-employee directors, the Committee shallbe the Board.
(i) Common Stock means the common stock, $.01 par value per share, of Spherion.
(j) Company means Spherion and all entities whose financial statements are required to beconsolidated with the financial statements of Spherion pursuant to United States generally acceptedaccounting principles and any other entity determined to be an affiliate as determined by theCommittee in its sole and absolute discretion.
(k) Covered Employee means covered employee as defined in Code Section 162(m)(3).
(l) Covered Individual means any current or former member of the Committee, any current orformer officer of the Company, or any individual designated pursuant to Section 5(b).
(m) Detrimental Activity shall mean (i) the disclosure to anyone outside the Company, or theuse in other than the Companys business, without written authorization from the Company, of anyconfidential information or proprietary information, relating to the business of the Company,acquired by a Participant prior to a termination of the Participants employment or service withthe Company; (ii) activity while employed or providing services that results, or if known couldresult, in the termination of the Participants employment or service that is classified by theCompany as a termination for Cause; (iii) any attempt, directly or indirectly, to solicit, induceor hire (or the identification for solicitation, inducement or hiring of) any non-
clerical employee of the Company to be employed by, or to perform services for, theParticipant or any person or entity with which the Participant is associated (including, but notlimited to, due to the Participants employment by, consultancy for, equity interest in, orcreditor relationship with such person or entity) or any person or entity from which theParticipant receives direct or indirect compensation or fees as a result of such solicitation,inducement or hire (or the identification for solicitation, inducement or hire) without, in allcases, written authorization from the Company; (iv) any attempt, directly or indirectly, to solicitin a competitive manner any current or prospective customer of the Company without, in all cases,written authorization from the Company; (v) the Participants Disparagement, or inducement ofothers to do so, of the Company or their past and present officers, directors, employees orproducts; (vi) without written authorization from the Company, the rendering of services for anyorganization, or engaging, directly or indirectly, in any business, which is competitive with theCompany, or which organization or business, or the rendering of services to such organization orbusiness, is otherwise prejudicial to or in conflict with the interests of the Company; provided,however that competitive activities shall only be those competitive with any business unit of theCompany with regard to which the Participant performed services at any time within the two (2)years prior to the termination of the Participants employment or service; or (vii) any otherconduct or act determined by the Committee, in its sole discretion, to be injurious, detrimental orprejudicial to any interest of the Company. For purposes of subparagraphs (i), (iii), (iv) and(vi) above, the Chief Executive Officer and the General Counsel of the Company shall each haveauthority to provide the Participant with written authorization to engage in the activitiescontemplated thereby and no other person shall have authority to provide the Participant with suchauthorization.
(n) Disability means a permanent and total disability within the meaning of Code Section22(e)(3); provided, however, that if a Participant and the Company have entered into an employmentor consulting agreement which defines the term Disability for purposes of such agreement,Disability shall be defined pursuant to the definition in such agreement with respect to any Awardgranted to the Participant on or after the effective date of the respective employment orconsulting agreement. The Committee shall determine in its sole and absolute discretion whether aDisability exists for purposes of the Plan.
(o) Disparagement means making any comments or statements to the press, the Companysemployees or any individual or entity with whom the company has a business relationship which wouldadversely affect in any manner: (i) the conduct of the business of the Company (including, withoutlimitation, any products or business plans or prospects), or (ii) the business reputation of theCompany or any of its products, or its past or present officers, directors or employees.
(p) Dividend Equivalents means an amount equal to the cash dividends paid by the Companyupon one share of Common Stock subject to an Award granted to a Participant under the Plan.
(q) Effective Date shall mean July 1, 2006.
(r) Eligible Individual means any employee, officer, director (employee or non-employeedirector) of the Company and any Prospective Employee to whom Awards are granted in connection withan offer of future employment with the Company.
(s) Exchange Act means the Securities Exchange Act of 1934, as amended.
(t) Exercise Price means the purchase price of each share of Common Stock subject to anAward.
(u) Fair Market Value means, unless otherwise required by the Code, as of any date, the lastsales price reported for the Common Stock on such date (i) as reported by the national securitiesexchange in the United States on which it is then traded or (ii) if not traded on any such nationalsecurities exchange, as quoted on an automated quotation system sponsored by the NationalAssociation of Securities Dealers, Inc., or if the Common Stock shall not have been reported orquoted on such date, on the first day prior thereto on which the Common Stock was reported orquoted; provided, however, that the Committee may modify the definition of Fair Market Value toreflect any changes in the trading practices of any exchange or automated system sponsored by theNational Association of Securities Dealers, Inc. on which the Common Stock is listed or traded. Ifthe Common Stock is not readily traded on a national securities exchange or any system sponsored bythe National Association of Securities Dealers, Inc., the Fair Market Value shall be determined ingood faith by the Committee.
(v) Grant Date means the date on which the Committee approves the grant of an Award or suchlater date as is specified by the Committee and set forth in the applicable Award Agreement.
(w) Incentive Stock Option means an incentive stock option within the meaning of CodeSection 422.
(x) Non-Employee Director means a director of Spherion who is not an active employee of theCompany.
(y) Non-qualified Stock Option means an Option which is not an Incentive Stock Option.
(z) Option means an option to purchase Common Stock granted pursuant to Sections 7 of thePlan.
(aa) Participant means any Eligible Individual who holds an Award under the Plan and any ofsuch individuals successors or permitted assigns.
(bb) Performance Goals means the specified performance goals which have been established bythe Committee in connection with an Award.
(cc) Performance Period means the period during which Performance Goals must be achieved inconnection with an Award granted under the Plan.
(dd) Performance Share means a right to receive a fixed number of shares of Common Stock, orthe cash equivalent, which is contingent on the achievement of certain Performance Goals during aPerformance Period.
(ee) Performance Unit means a right to receive a designated dollar value, or shares ofCommon Stock of the equivalent value, which is contingent on the achievement of Performance Goalsduring a Performance Period.
(ff) Person shall mean any person, corporation, partnership, joint venture or other entityor any group (as such term is defined for purposes of Section 13(d) of the Exchange Act), otherthan a Parent or Subsidiary.
(gg) Plan means this Spherion Corporation 2006 Stock Incentive Plan.
(hh) Prospective Employee means any individual who has committed to become an employee ofthe Company within sixty (60) days from the date an Award is granted to such individual.
(ii) Restricted Stock means Common Stock subject to certain restrictions, as determined bythe Committee, and granted pursuant to Section 9 hereunder.
(jj) Restricted Stock Unit means the right to receive to receive a fixed number of shares ofCommon Stock, or the cash equivalent, granted pursuant to Section 9 hereunder.
(kk) Section 424 Employee means an employee of Spherion or any subsidiary corporation orparent corporation as such terms are defined in and in accordance with Code Section 424. Theterm Section 424 Employee also includes employees of a corporation issuing or assuming anyOptions in a transaction to which Code Section 424(a) applies.
(ll) Spherion means Spherion Corporation, a Delaware corporation.
(mm) Stock Appreciation Right means the right to receive all or some portion of the increasein value of a fixed number of shares of Common Stock granted pursuant to Section 8 hereunder.
(nn) Transfer means, as a noun, any direct or indirect, voluntary or involuntary, exchange,sale, bequeath, pledge, mortgage, hypothecation, encumbrance, distribution, transfer, gift,assignment or other disposition or attempted disposition of, and, as a verb, directly orindirectly, voluntarily or involuntarily, to exchange, sell, bequeath, pledge, mortgage,hypothecate, encumber, distribute, transfer, give, assign or in any other manner whatsoever disposeor attempt to dispose of.
Awards may be granted under the Plan to any Eligible Individual as determined by the Committee fromtime to time on the basis of their importance to the business of the Company pursuant to the termsof the Plan.
(a) Committee. The Plan shall be administered by the Committee, which shall have thefull power and authority to take all actions, and to make all determinations not inconsistent withthe specific terms and provisions of the Plan deemed by the Committee to be necessary orappropriate to the administration of the Plan, any Award granted or any Award Agreement enteredinto hereunder. The Committee may correct any defect or supply any omission or reconcile anyinconsistency in the Plan or in any Award Agreement in the manner and to the extent it shall deemexpedient to carry the Plan into effect as it may determine in its sole discretion. The decisionsby the Committee shall be final, conclusive and binding with respect to the interpretation andadministration of the Plan, any Award or any Award Agreement entered into under the Plan.
(b) Advisors to Committee. The Committee may designate employees of the Company andprofessional advisors to assist the Committee in the administration of the Plan. The Committee maygrant authority to the Chief Executive Officer of the Company or any other employee of the Companyto execute agreements or other documents on behalf of the Committee in connection with the grant ofan Award or the administration of the Plan. The Committee may employ such legal counsel,consultants, and agents as it may deem desirable for the administration of the Plan and may relyupon any advice and any computation received from any such counsel, consultant, or agent. TheCompany shall pay all expenses and costs incurred by the Committee for the engagement of any suchcounsel, consultant, or agent.
(c) Participants Outside the U.S. In order to conform with the provisions of locallaws and regulations in foreign countries in which the Company operates, the Committee shall havethe sole discretion to (i) modify the terms and conditions of the Awards granted under the Plan toEligible Individuals located outside the United States; (ii) establish subplans with suchmodifications as may be necessary or advisable under the circumstances present by local laws andregulations; and (iii) take any action which it deems advisable to comply with or otherwise reflectany necessary governmental regulatory procedures, or to obtain any exemptions or approvalsnecessary with respect to the Plan or any subplan established hereunder.
(d) Liability and Indemnification. No Covered Individual shall be liable for anyaction or determination made in good faith with respect to the Plan, any Award granted or any AwardAgreement entered into hereunder. The Company shall, to the maximum extent permitted by applicablelaw and the Certificate of Incorporation and By-Laws of Spherion, indemnify and hold harmless eachCovered Individual against any cost or expense (including reasonable attorney fees reasonablyacceptable to the Company) or liability (including any amount paid in settlement of a claim withthe approval of the Company), and amounts advanced to such Covered Individual necessary to pay theforegoing at the earliest time and to the fullest
extent permitted, arising out of any act or omission to act in connection with the Plan, anyAward granted or any Award Agreement entered into hereunder. Such indemnification shall be inaddition to any rights of indemnification such individuals may have under applicable law or underthe Certificate of Incorporation or By-Laws of Spherion. Notwithstanding anything else herein,this indemnification will not apply to the actions or determinations made by a Covered Individualwith regard to Awards granted to such Covered Individual under the Plan or arising out of suchCovered Individuals own fraud or bad faith.
6. COMMON STOCK
(a) Shares Available for Awards. The Common Stock that may be issued pursuant toAwards granted under the Plan shall be treasury shares or authorized but unissued shares of theCommon Stock. The total number of shares of Common Stock that may be issued pursuant to Awardsgranted under the Plan shall be the sum of Five Million (5,000,000) shares plus any shares ofCommon Stock that were subject to an award granted pursuant to the Spherion Corporation 2000 StockIncentive Plan in which the award is cancelled, forfeited or terminated for any reason after theEffective Date.
(i) With respect to the shares of Common Stock reserved pursuant to thisSection, a maximum of five million (5,000,000) of such shares may be subject to grants ofIncentive Stock Options.
(ii) With respect to the shares of Common Stock reserved pursuant to thisSection, a maximum of five hundred thousand (500,000) of such shares may be subject togrants of Awards to any one Eligible Individual during any one fiscal year.
(iii) The maximum value at Grant Date of grants of Performance Units whichmay be granted to any one Eligible Individual during any one fiscal year shall be twomillion dollars ($2,000,000).
(b) Reduction of Shares Available for Awards. Upon the granting of an Award, thenumber of shares of Common Stock available under this Section hereof for the granting of furtherAwards shall be reduced as follows:
(i) In connection with the granting of an Option or Stock Appreciation Right,the number of shares of Common Stock shall be reduced by the number of shares of CommonStock subject to the Option or Stock Appreciation Right.
(ii) In connection with the granting of an Award that is settled in CommonStock, other than the granting of an Option or Stock Appreciation Right, the number of shares of Common Stock shall be reduced by the number of shares of Common Stock subject tothe Award; provided, however, to the extent the aggregate number of shares of Common Stocksubject to Awards (other than Options or Stock Appreciation Rights) exceed two million fivehundred thousand (2,500,000) shares, such excess shall be counted against the overall sharelimit available under Section 6(a) as
three shares of Common Stock for each share of Common Stock issued in connection withsuch Award.
(iii) Awards settled in cash shall not count against the total number of shares of Common Stock available to be granted pursuant to the Plan. Any Common Stocksubject to a Stock Appreciation Right which is not issued pursuant to settling such StockAppreciation Right shall not be counted against the total number of shares of Common Stockavailable to be granted pursuant to the Plan.
(c) Cancelled, Forfeited, or Surrendered Awards. If any Award is cancelled,forfeited or terminated for any reason prior to exercise or becoming vested in full, the shares ofCommon Stock that were subject to such Award will to the extent cancelled, forfeited or terminatedshall be available for future Awards granted under the Plan as if said Award had never beengranted; provided, however, that any shares of Common Stock subject to an Award, other than a StockAppreciation Right, which is cancelled, forfeited or terminated in order to pay the Exercise Price,purchase price or any taxes or tax withholdings on an Award shall not be available for futureAwards granted under the Plan. Any Common Stock subject to a Stock Appreciation Right which isnot issued upon settling such Stock Appreciation Right shall be available for future Awards grantedunder the Plan.
(d) Recapitalization. If the outstanding shares of Common Stock are increased ordecreased or changed into or exchanged for a different number or kind of shares or other securitiesof Spherion by reason of any recapitalization, reclassification, reorganization, stock split,reverse split, combination of shares, exchange of shares, stock dividend or other distributionpayable in capital stock of Spherion or other increase or decrease in such shares effected withoutreceipt of consideration by Spherion occurring after the Effective Date, an appropriate andproportionate adjustment shall be made by the Committee (i) in the aggregate number and kind ofshares of Common Stock available under the Plan; (ii) in the aggregate limit of the number ofshares of Common Stock that may be granted pursuant to an Incentive Stock Option, (iii) in thelimits on the number of shares of Common Stock that may be granted to an Eligible Employee in anyone fiscal year; (iv) in the calculation of the reduction of shares of Common Stock available underthe Plan; (v) in the number and kind of shares of Common Stock issuable upon exercise (or vesting)of outstanding Awards granted under the Plan; (vi) in the Exercise Price per share of outstandingOptions granted under the Plan and (vii) the number of shares of Common Stock subject to Awardswhich may be granted to Non-Employee Directors under Section 11. No fractional shares of CommonStock or units of other securities shall be issued pursuant to any such adjustment under thisSection 6(d), and any fractions resulting from any such adjustment shall be eliminated in each caseby rounding downward to the nearest whole share or unit. Any adjustments made under this Section6(d) with respect to any Incentive Stock Options must be made in accordance with Code Section 424.
(a) Grant of Options. Subject to the terms and conditions of the Plan, the Committeemay grant to Eligible Individuals Options to purchase such number of shares of
Common Stock on such terms and conditions as the Committee may determine. Each grant of anOption must satisfy the requirements set forth in this Section.
(b) Type of Options. Each Option granted under the Plan may be designated by theCommittee, in its sole discretion, as either (i) an Incentive Stock Option, or (ii) a Non-qualifiedStock Option. Options designated as Incentive Stock Options that fail to continue to meet therequirements of Code Section 422 shall be re-designated as Non-qualified Stock Optionsautomatically on the date of such failure to continue to meet such requirements without furtheraction by the Committee. In the absence of any designation, Options granted under the Plan will bedeemed to be Non-qualified Stock Options.
(c) Exercise Price. Subject to the limitations set forth in the Plan relating toIncentive Stock Options, the Exercise Price of an Option shall be fixed by the Committee and statedin the respective Award Agreement, provided that the Exercise Price of the shares of Common Stocksubject to such Option may not be less than Fair Market Value of the Common Stock on the GrantDate, or if greater, the par value of the Common Stock.
(d) Limitation on Repricing. Unless such action is approved by Spherionsshareholders: (i) no outstanding Option granted under the Plan may be amended to provide anExercise Price per share that is lower than the then-current exercise price per share of suchoutstanding Option (other than adjustments to the Exercise Price pursuant to Sections 6(d) and 13);(ii) the Committee may not cancel any outstanding Option and grant in substitution therefore newAwards under the Plan covering the same or a different number of shares of Common Stock and havingan Exercise Price per share lower than the then-current Exercise Price per share of the cancelledOption (other than adjustments to the Exercise Price pursuant to Sections 6(d) and 13); and (iii)the Committee may not authorize the repurchase of an outstanding Option (other than pursuant toSections 6(d), 12 and 13).
(e) Limitation on Option Period. Subject to the limitations set forth in the Planrelating to Incentive Stock Options, Options granted under the Plan and all rights to purchaseCommon Stock thereunder shall terminate no later than the seventh anniversary of the Grant Date ofsuch Options, or on such earlier date as may be stated in the Award Agreement relating to suchOption. In the case of Options expiring prior to the seventh anniversary of the Grant Date, theCommittee may in its discretion, at any time prior to the expiration or termination of saidOptions, extend the term of any such Options for such additional period as it may determine, but inno event beyond the seventh anniversary of the Grant Date thereof.
(f) No Reload of Stock Options. The Plan shall not permit an additional automaticgrant of an Option to a Participant who exercises an Option by surrendering other shares of CommonStock (reload stock option).
(g) Limitations on Incentive Stock Options. Notwithstanding any other provisions ofthe Plan, the following provisions shall apply with respect to Incentive Stock Options grantedpursuant to the Plan.
(i) Limitation on Grants. Incentive Stock Options may only begranted to Section 424 Employees. The aggregate Fair Market Value (determined at the timesuch Incentive Stock Option is granted) of the shares of Common Stock for which anyindividual may have Incentive Stock Options which first become vested and exercisable in anycalendar year (under all incentive stock option plans of the Company) shall not exceed$100,000. Options granted to such individual in excess of the $100,000 limitation, and anyOptions issued subsequently which first become vested and exercisable in the same calendaryear, shall be treated as Non-qualified Stock Options.
(ii) Minimum Exercise Price. In no event may the Exercise Price ofan Incentive Stock Option be less than 100% of the Fair Market Value as of the Grant Date ofa share of Common Stock.
(iii) Ten Percent Stockholder. Notwithstanding any other provisionof the Plan to the contrary, in the case of Incentive Stock Options granted to a Section 424Employee who, at the time the Option is granted, owns (after application of the rules setforth in Code Section 424(d)) stock possessing more than ten percent of the total combinedvoting power of all classes of stock of Spherion, such Incentive Stock Options (i) must havean Exercise Price that is at least 110% of the Fair Market Value as of the Grant Date of ashare of Common Stock, and (ii) must not be exercisable after the fifth anniversary of theGrant Date.
(h) Vesting Schedule and Conditions. No Options may be exercised prior to thesatisfaction of the conditions and vesting schedule provided for in the Award Agreement relatingthereto. Except as otherwise provided in Sections 11, 12 and 13 of the Plan, Options subjectsolely to a future service requirement shall have a vesting period of not less than three yearsfrom the Grant Date (but permitting partial vesting, on a pro rata or other basis, over such time);provided, however, Options which are awarded to Non-Employee Directors and subject solely to afuture service requirement shall not vest prior to the first (1st) anniversary of theGrant Date.
(i) Exercise. When the conditions to the exercise of an Option have been satisfied,the Participant may exercise the Option only in accordance with the following provisions. TheParticipant shall deliver to Spherion a written notice stating that the Participant is exercisingthe Option and specifying the number of shares of Common Stock which are to be purchased pursuantto the Option, and such notice shall be accompanied by payment in full of the Exercise Price of theshares for which the Option is being exercised, by one or more of the methods provided for in thePlan. Said notice must be delivered to Spherion at its principal office and addressed to theattention of the Treasury Department, Spherion Corporation, 2050 Spectrum Boulevard, Ft.Lauderdale, FL 33309. The minimum number of shares of Common Stock with respect to which anOption may be exercised, in whole or in part, at any time shall be the lesser of 100 shares or themaximum number of shares available for purchase under the Option at the time of exercise. Anattempt to exercise any Option granted hereunder other than as set forth in the Plan shall beinvalid and of no force and effect.
(j) Payment. Payment of the Exercise Price for the shares of Common Stock purchasedpursuant to the exercise of an Option shall be made by one of the following methods:
(i) by cash, certified or cashiers check, bank draft or money order; or
(ii) through the delivery to Spherion of shares of Common Stock which havebeen previously owned by the Participant for the requisite period necessary to avoid acharge to Spherions earnings for financial reporting purposes; such shares shall be valued,for purposes of determining the extent to which the Exercise Price has been paid thereby, attheir Fair Market Value on the date of exercise; without limiting the foregoing, theCommittee may require the Participant to furnish an opinion of counsel acceptable to theCommittee to the effect that such delivery would not result in Spherion incurring anyliability under Section 16(b) of the Exchange Act.
Notwithstanding the foregoing, the Committee may, in its sole and absolute discretion and to theextent permitted by applicable law, permit such payment to be made (i) through a cashless exercisesale and remittance procedure pursuant to which the Participant shall concurrently provideirrevocable instructions (1) to a brokerage firm approved by the Committee to effect the immediatesale of the purchased shares and remit to Spherion, out of the sale proceeds available on thesettlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchasedshares plus all applicable Federal, state and local income, employment, excise and other taxesrequired to be withheld by the Company by reason of such exercise and (2) to Spherion to deliverthe certificates for the purchased shares directly to such brokerage firm in order to complete thesale; or (ii) by any other method as may be permitted by the Committee.
(k) Termination of Employment, Disability or Death. Unless otherwise provided in anAward Agreement, upon the termination of the employment or other service of a Participant withCompany for any reason, all of the Participants outstanding Options (whether vested or unvested)shall be subject to the rules of this paragraph. Upon such termination, the Participants unvestedOptions shall expire. Unless otherwise determined by the Committee, temporary absence fromemployment because of illness, vacation, approved leaves of absence or military service shall notconstitute a termination of employment or service.
(i) Termination for Reason Other Than Cause, Disability or Death. Ifa Participants termination of employment is for any reason other than Cause (includingDetrimental Activity or a voluntary termination within ninety (90) days after occurrence ofan event which would be grounds for termination of employment by the Company for Cause orDetrimental Activity (without regard to any notice or cure period requirements)), Disabilityor death, any Option held by such Participant may be exercised, to the extent exercisable attermination, by the Participant at any time within a period not to exceed ninety (90) daysfrom the date of such termination, but in no event after the termination of the Optionpursuant to its terms.
(ii) Disability. If a Participants termination of employment orservice with the Company is by reason of a Disability of such Participant, the Participantshall
have the right at any time within a period not to exceed one (1) year after suchtermination, but in no event after the termination of the Option pursuant to its terms, toexercise, in whole or in part, any vested portion of the Option held by such Participant atthe date of such termination; provided, however, that if the Participant dies within suchperiod, any vested Option held by such Participant upon death shall be exercisable by theParticipants estate, devisee or heir at law (whichever is applicable) for a period not toexceed one (1) year after the Participants death, but in no event after the termination ofthe Option pursuant to its terms.
(iii) Death. If a Participant dies while in the employment orservice of the Company, the Participants estate or the devisee named in the Participantsvalid last will and testament or the Participants heir at law who inherits the Option hasthe right, at any time within a period not to exceed one (1) year after the date of suchParticipants death, but in no event after the termination of the Option pursuant to itsterms, to exercise, in whole or in part, any portion of the vested Option held by suchParticipant at the date of such Participants death.
(iv) Termination for Cause. In the event the termination is forCause, Detrimental Activity or a voluntary termination within ninety (90) days afteroccurrence of an event which would be grounds for termination of employment by the Companyfor Cause or Detrimental Activity (without regard to any notice or cure period requirement),any Option held by the Participant at the time of occurrence of the event which would begrounds for termination of employment by the Company for Cause shall be deemed to haveterminated and expired upon occurrence of the event which would be grounds for terminationof employment by the Company for Cause.
8. STOCK APPRECIATION RIGHTS
(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of thePlan, the Committee may grant to such Eligible Individuals as the Committee may determine, StockAppreciation Rights, in such amounts, as the Committee shall determine in its sole and absolutediscretion. Each grant of a Stock Appreciation Right shall satisfy the requirements as set forthin this Section.
(b) Terms and Conditions of Stock Appreciation Rights. Unless otherwise provided inan Award Agreement, the terms and conditions (including, without limitation, the limitations on theExercise Period, the Exercise Price and repricing) of the Stock Appreciation Right shall besubstantially identical (to the extent possible taking into account the differences related to thecharacter of the Stock Appreciation Right) to the terms and conditions that would have beenapplicable under Section 7 above were the grant of the Stock Appreciation Rights a grant of anOption.
(c) Exercise of Stock Appreciation Rights. Stock Appreciation Rights shall beexercised by a Participant only by written notice delivered to the President of Spherion,
specifying the number of shares of Common Stock with respect to which the Stock AppreciationRight is being exercised.
(d) Payment of Stock Appreciation Right. Unless otherwise provided in an AwardAgreement, upon exercise of a Stock Appreciation Right, the Participant or Participants estate,devisee or heir at law (whichever is applicable) shall be entitled to receive payment, in cash, inshares of Common Stock, or in a combination thereof, as determined by the Committee in its sole andabsolute discretion. The amount of such payment shall be determined by multiplying the excess, ifany, of the Fair Market Value of a share of Common Stock on the date of exercise over the FairMarket Value of a share of Common Stock on the Grant Date, by the number of shares of Common Stockwith respect to which the Stock Appreciation Rights are then being exercised. Notwithstanding theforegoing, the Company may limit in any manner the amount payable with respect to a StockAppreciation Right by including such limitation in the Award Agreement.
9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
(a) Grant of Restricted Stock. Subject to the terms and conditions of the Plan, theCommittee may grant to such Eligible Individuals as the Committee may determine, Restricted Stockor Restricted Stock Units, in such amounts, as the Committee shall determine in its sole andabsolute discretion. Each grant of Restricted Stock or Restricted Stock Units shall satisfy therequirements as set forth in this Section.
(b) Restrictions. The Committee shall impose such restrictions on any RestrictedStock or Restricted Stock Units granted pursuant to the Plan as it may deem advisable including,without limitation; time based vesting restrictions, or the attainment of Performance Goals.Except as otherwise provided in Sections 11, 12 and 13 of the Plan, Restricted Stock and RestrictedStock Units which are subject solely to a future service requirement shall not vest prior to thethird (3rd) anniversary of the Grant Date; provided, however, that Restricted Stock andRestricted Stock Units which are awarded to Non-Employee Directors and subject solely to a futureservice requirement shall not vest prior to the first (1 st) anniversary of the GrantDate. Shares of Restricted Stock or Restricted Stock Units subject to the attainment ofPerformance Goals will be subject to a minimum one-year performance period and will be releasedfrom restrictions only after the attainment of such Performance Goals has been certified by theCommittee in accordance with Section 10(d).
(c) Certificates and Certificate Legend. With respect to a grant of Restricted Stock,the Company may issue a certificate evidencing such Restricted Stock to the Participant or issueand hold such shares of Restricted Stock for the benefit of the Participant until the applicablerestrictions expire. The Company may legend the certificate representing Restricted Stock to giveappropriate notice of such restrictions. In addition to any such legends, each certificaterepresenting shares of Restricted Stock granted pursuant to the Plan shall bear the followinglegend:
The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, aresubject to certain terms, conditions, and restrictions on transfer as setforth in the Spherion Corporation 2006 Stock Incentive Plan, and in anAgreement entered into by and between the registered owner of such sharesand the company, dated . A copy of the Plan and the AwardAgreement may be obtained from the Secretary of the company.
(d) Removal of Restrictions. Except as otherwise provided in the Plan, shares ofRestricted Stock shall become freely transferable by the Participant upon the lapse of theapplicable restrictions. Once the shares of Restricted Stock are released from the restrictions,the Participant shall be entitled to have the legend required by paragraph (c) above removed fromthe share certificate evidencing such Restricted Stock and the Company shall pay or distribute tothe Participant all dividends and distributions held in escrow by the Company with respect to suchRestricted Stock. Upon the lapse of the applicable restrictions with respect to any RestrictedStock Units, the Company shall deliver to the Participant, one share of Common Stock for eachRestricted Stock Unit and any Dividend Equivalents (if any) credited with respect to suchRestricted Stock Units. Unless otherwise provided in an Award Agreement, the Committee may, in itssole discretion, elect to pay cash or part cash and part Common Stock in lieu of delivering onlyCommon Stock for Restricted Stock Units. If a cash payment is made in lieu of delivering CommonStock, the amount of such cash payment for each share of Common Stock to which a Participant isentitled shall be equal to the Fair Market Value of the Common Stock on the date on which theapplicable restrictions lapsed with respect to the related Restricted Stock Unit and any DividendEquivalents (if any) credited with respect to such Restricted Stock Units.
(e) Stockholder Rights. Until the expiration of all applicable restrictions, theRestricted Stock shall be treated as outstanding, the Participant holding shares of RestrictedStock may exercise full voting rights with respect to such shares and shall be entitled to receiveall dividends and other distributions paid with respect to such shares while they are so held. Ifany such dividends or distributions are paid in shares of Common Stock, such shares shall besubject to the same restrictions on transferability and forfeitability as the shares of RestrictedStock with respect to which they were paid. Notwithstanding anything to the contrary, at thediscretion of the Committee, all such dividends and distributions may be held in escrow by theCompany until all restrictions on the respective Restricted Stock have lapsed. With respect toRestricted Stock Units, a Participant shall not have any right to vote on any matter submitted toSpherions stockholders and, unless otherwise provided for in an Award Agreement or as provided forin Section 6(d) of the Plan, shall not be entitled to receive dividends, Dividend Equivalent orother distributions paid with respect to such shares until the shares of Common Stock attributableto such Restricted Stock Units have been issued.
(f) Termination of Service. Unless otherwise provided in a Award Agreement, if aParticipants employment or service with the Company terminates for any reason, all nonvestedshares of Restricted Stock held by the Participant and any dividends or distributions held inescrow by Spherion with respect to such Restricted Stock shall be forfeited immediately andreturned to the Company. Notwithstanding this paragraph, all grants of Restricted Stock that vestsolely upon the attainment of Performance Goals shall be treated
pursuant to the terms and conditions that would have been applicable under Section 10 as ifsuch grants of Restricted Stock were Awards of Performance Shares.
10. PERFORMANCE SHARES AND PERFORMANCE UNITS
(a) Grant of Performance Shares and Performance Units. Subject to the terms andconditions of the Plan, the Committee may grant to such Eligible Individuals as the Committee maydetermine, Performance Shares and Performance Units, in such amounts, as the Committee shalldetermine in its sole and absolute discretion. Each grant of a Performance Share or a PerformanceUnit shall satisfy the requirements as set forth in this Section.
(b) Performance Goals. Performance Goals will be based on one or more of thefollowing criteria, as determined by the Committee in its absolute and sole discretion: (i) theattainment of certain target levels of, or a specified increase in, Spherions enterprise value orvalue creation targets; (ii) the attainment of certain target levels of, or a percentage increasein, Spherions after-tax or pre-tax profits including, without limitation, that attributable toSpherions continuing and/or other operations; (iii) the attainment of certain target levels of, ora specified increase relating to, Spherions operational cash flow or working capital, or acomponent thereof; (iv) the attainment of certain target levels of, or a specified decreaserelating to, Spherions operational costs, or a component thereof (v) the attainment of a certainlevel of reduction of, or other specified objectives with regard to limiting the level of increasein all or a portion of bank debt or other of Spherions long-term or short-term public or privatedebt or other similar financial obligations of Spherion, which may be calculated net of cashbalances and/or other offsets and adjustments as may be established by the Committee; (vi) theattainment of a specified percentage increase in earnings per share or earnings per share fromSpherions continuing operations; (vii) the attainment of certain target levels of, or a specifiedpercentage increase in, Spherions net sales, revenues, net income or earnings before income tax orother exclusions; (viii) the attainment of certain target levels of, or a specified increase in,Spherions return on capital employed or return on invested capital; (ix) the attainment of certaintarget levels of, or a percentage increase in, Spherions after-tax or pre-tax return onstockholder equity; (x) the attainment of certain target levels in the fair market value ofSpherions Common Stock; (xi) the growth in the value of an investment in the Common Stock assumingthe reinvestment of dividends; (xii) the attainment of certain performance zone targets; and (xiii)the attainment of certain target levels of, or a specified increase in, EBITDA (earnings beforeincome tax, depreciation and amortization). In addition, Performance Goals may be based upon theattainment by a subsidiary, division or other operational unit of Spherion of specified levels ofperformance under one or more of the measures described above. Further, the Performance Goals maybe based upon the attainment by Spherion (or a subsidiary, division or other operational unit ofSpherion) of specified levels of performance under one or more of the foregoing measures relativeto the performance of other corporations. To the extent permitted under Code Section 162(m) of theCode (including, without limitation, compliance with any requirements for stockholder approval),the Committee may (i) designate additional business criteria upon which the Performance Goals maybe based; (ii) modify, amend or adjust the business criteria described herein or (iii) incorporatein the Performance Goals provisions regarding changes in accounting methods, corporate transactions(including, without limitation,
dispositions or acquisitions) and similar events or circumstances. Performance Goals mayinclude a threshold level of performance below which no Award will be earned, levels of performanceat which an Award will become partially earned and a level at which an Award will be fully earned.
(c) Terms and Conditions of Performance Shares and Performance Units. The applicableAward Agreement shall set forth (i) the number of Performance Shares or the dollar value ofPerformance Units granted to the Participant; (ii) the Performance Period and Performance Goalswith respect to each such Award; (iii) the threshold, target and maximum shares of Common Stock ordollar values of each Performance Share or Performance Unit and corresponding Performance Goals,and (iv) any other terms and conditions as the Committee determines in its sole and absolutediscretion. The Committee shall establish, in its sole and absolute discretion, the PerformanceGoals for the applicable Performance Period for each Performance Share or Performance Unit grantedhereunder. Performance Goals for different Participants and for different grants of PerformanceShares and Performance Units need not be identical. Unless otherwise provided in an AwardAgreement, the Participants rights as a stockholder in Performance Shares and Performance Unitsshall be substantially identical to the terms and conditions that would have been applicable underSection 9 above if the Performance Shares were Restricted Stock and the Performance Units were agrant of Restricted Units.
(d) Determination and Payment of Performance Units or Performance Shares Earned. Assoon as practicable after the end of a Performance Period, the Committee shall determine the extentto which Performance Shares or Performance Units have been earned on the basis of the Companysactual performance in relation to the established Performance Goals as set forth in the applicableAward Agreement and shall certify these results in writing. As soon as practicable after theCommittee has determined that an amount is payable or should be distributed with respect to aPerformance Share or a Performance Unit, the Committee shall cause the amount of such Award to bepaid or distributed to the Participant or the Participants estate, devisee or heir at law(whichever is applicable). Unless otherwise provided in an Award Agreement, the Committee shalldetermine in its sole and absolute discretion whether payment with respect to the Performance Shareor Performance Unit shall be made in cash, in shares of Common Stock, or in a combination thereof.For purposes of making payment or a distribution with respect to a Performance Share or PerformanceUnit, the cash equivalent of a share of Common Stock shall be determined by the Fair Market Valueof the Common Stock on the day the Committee designates the Performance Shares or PerformanceUnits to be payable.
(e) Termination of Employment. Unless otherwise provided in an Award Agreement, if aParticipants employment or service with the Company terminates for any reason, all of theParticipants outstanding Performance Shares and Performance Units shall be subject to the rules ofthis Section.
(i) Termination for Reason Other Than Death or Disability. If aParticipants employment or service with the Company terminates prior to the expiration of aPerformance Period with respect to any Performance Units or Performance Shares
held by such Participant for any reason other than death or Disability the outstandingPerformance Units or Performance Shares held by such Participant for which the PerformancePeriod has not yet expired shall terminate upon such termination and the Participant shallhave no further rights pursuant to such Performance Units or Performance Shares.
(ii) Termination of Employment for Death or Disability. If aParticipants employment or service with the Company terminates by reason of theParticipants death or Disability prior to the end of a Performance Period, the Participant,or the Participants estate, devisee or heir at law (whichever is applicable) shall beentitled to a payment of the Participants outstanding Performance Units and PerformanceShare at the end of the applicable Performance Period, pursuant to the terms of the Plan andthe Participants Award Agreement; provided, however, that the Participant shall be deemedto have earned only that proportion (to the nearest whole unit or share) of the PerformanceUnits or Performance Shares granted to the Participant under such Award as the number ofmonths of the Performance Period which have elapsed since the first day of the PerformancePeriod for which the Award was granted to the end of the month in which the Participantstermination of employment or service, bears to the total number of months in the PerformancePeriod, subject to the attainment of the Performance Goals associated with the Award ascertified by the Committee. The right to receive any remaining Performance Units orPerformance Shares shall be canceled and forfeited.
11. AWARD GRANTS TO NON-EMPLOYEE DIRECTORS
(a) Annual Grants. The maximum number of shares of Common Stock that may be issuedpursuant to Awards to a Non-Employee Director during any fiscal year shall be thirty thousand(30,000).
(b) Plan Limit on Grants. The maximum number of shares of Common Stock that may beissued to Non-Employee Directors under the Plan shall be seven hundred fifty thousand (750,000).
(c) Vesting of Certain Non-Employee Director Awards. Notwithstanding the minimumvesting provisions in Section 7(h) and 9(b) of the Plan, any Award granted to a Non-EmployeeDirector in lieu of cash compensation shall not be subject to any minimum vesting requirements.
12. CHANGE IN CONTROL
Unless otherwise provided in an Award Agreement, prior to a Change in Control of Spherion, theCommittee may in its sole and absolute discretion, provide on a case by case basis that (i) some orall outstanding Awards may become immediately exercisable or vested, without regard to anylimitation imposed pursuant to this Plan, (ii) that Awards shall terminate; provided, however, thatParticipants shall have the right, immediately prior to the occurrence of such Change in Controland during such reasonable period as the Committee in its sole discretion shall determine anddesignate, to exercise any vested Award in whole or in part, (iii) that Awards
shall terminate provided that Participants shall be entitled to a cash payment equal to theChange in Control Price with respect to shares subject to the vested portion of the Award net ofthe Exercise Price thereof (if applicable), (iv) provide that, in connection with a liquidation ordissolution of Spherion, Awards shall convert into the right to receive liquidation proceeds net ofthe Exercise Price (if applicable) and (v) any combination of the foregoing; provided, however, theCommittee shall not take any action permitted by this Section unless counsel for Spheriondetermines that such action will not result in adverse tax consequences to a Participant underSection 409A of the Code. In the event that the Committee does not terminate or convert an Awardupon a Change in Control of Spherion, then the Award shall be assumed, or substantially equivalentAwards shall be substituted, by the acquiring, or succeeding corporation (or an affiliate thereof).
13. CHANGE IN STATUS OF PARENT OR SUBSIDIARY
Unless otherwise provided in an Award Agreement or otherwise determined by the Committee, inthe event that an entity which was previously a part of the Company is no longer a part of theCompany, as determined by the Committee in its sole discretion, the Committee may, in its sole andabsolute discretion (i) provide on a case by case basis that some or all outstanding Awards held bya Participant employed by or performing service for such entity may become immediately exercisableor vested, without regard to any limitation imposed pursuant to this Plan and/or (ii) treat theemployment or other services of a Participant employed by such entity as terminated if suchParticipant is not employed by Spherion or any entity that is a part of the Company immediatelyafter such event.
14. REQUIREMENTS OF LAW
(a) Violations of Law. The Company shall not be required to sell or issue any sharesof Common Stock under any Award if the sale or issuance of such shares would constitute a violationby the individual exercising the Award, the Participant or the Company of any provisions of any lawor regulation of any governmental authority, including without limitation any provisions of theSarbanes-Oxley Act, and any other Federal or state securities laws or regulations. Anydetermination in this connection by the Committee shall be final, binding, and conclusive. TheCompany shall not be obligated to take any affirmative action in order to cause the exercise of anAward, the issuance of shares pursuant thereto or the grant of an Award to comply with any law orregulation of any governmental authority.
(b) Registration. At the time of any exercise or receipt of any Award, the Companymay, if it shall determine it necessary or desirable for any reason, require the Participant (orParticipants heirs, legatees or legal representative, as the case may be), as a condition to theexercise or grant thereof, to deliver to the Company a written representation of present intentionto hold the shares for their own account as an investment and not with a view to, or for sale inconnection with, the distribution of such shares, except in compliance with applicable Federal andstate securities laws with respect thereto. In the event such representation is required to bedelivered, an appropriate legend may be placed upon each certificate delivered to the Participant(or Participants heirs, legatees or legal representative, as the case may be) upon
the Participants exercise of part or all of the Award or receipt of an Award and a stoptransfer order may be placed with the transfer agent. Each Award shall also be subject to therequirement that, if at any time the Company determines, in its discretion, that the listing,registration or qualification of the shares subject to the Award upon any securities exchange orunder any state or federal law, or the consent or approval of any governmental regulatory body isnecessary or desirable as a condition of or in connection with, the issuance or purchase of theshares thereunder, the Award may not be exercised in whole or in part and the restrictions on anAward may not be removed unless such listing, registration, qualification, consent or approvalshall have been effected or obtained free of any conditions not acceptable to the Company in itssole discretion. The Participant shall provide the Company with any certificates, representationsand information that the Company requests and shall otherwise cooperate with the Company inobtaining any listing, registration, qualification, exemption, consent or approval that the Companydeems necessary or appropriate. The Company shall not be obligated to take any affirmative actionin order to cause the exercisability or vesting of an Award, to cause the exercise of an Award orthe issuance of shares pursuant thereto, or to cause the grant of Award to comply with any law orregulation of any governmental authority.
(c) Withholding. The Committee may make such provisions and take such steps as it maydeem necessary or appropriate for the withholding of any taxes that the Company is required by anylaw or regulation of any governmental authority, whether Federal, state or local, domestic orforeign, to withhold in connection with the grant or exercise of an Award, or the removal ofrestrictions on an Award including, but not limited to: (i) the withholding of delivery of sharesof Common Stock until the holder reimburses the Company for the amount the Company is required towithhold with respect to such taxes, (ii) the canceling of any number of shares of Common Stockissuable in an amount sufficient to reimburse the Company for the amount it is required to sowithhold, (iii) withholding the amount due from any such persons wages or compensation due to suchperson, or (iv) requiring the Participant to pay the Company cash in the amount the Company isrequired to withhold with respect to such taxes.
(d) Governing Law. The Plan shall be governed by, and construed and enforced inaccordance with, the laws of the State of Delaware.
15. GENERAL PROVISIONS
(a) Award Agreements. All Awards granted pursuant to the Plan shall be evidenced byan Award Agreement. Each Award Agreement shall specify the terms and conditions of the Awardgranted and shall contain such provisions, as the Committee shall deem appropriate. The terms ofeach Award Agreement need not be identical for Eligible Individuals provided that all AwardAgreements comply with the terms of the Plan.
(b) Purchase Price. To the extent the purchase price of any Award granted hereunderis less than par value of a share of Common Stock and such purchase price is not permitted byapplicable law, the per share purchase price shall be equal to the par value of a share of CommonStock.
(c) Dividends and Dividend Equivalents. Except as provided for in Section 6(d),Section 9(e) and Section 10 of the Plan, a Participant shall not be entitled to receive, currentlyor on a deferred basis, cash or stock dividends, Dividend Equivalents, or cash payments in amountsequivalent to cash or stock dividends on shares of Commons Stock covered by an Award which has notvested or an Option.
(d) Deferral of Awards. The Committee may from time to time establish procedurespursuant to which a Participant may elect to defer, until a time or times later than the vesting ofa Restricted Stock Unit or a Performance Unit, receipt of all or a portion of the shares of CommonStock or cash subject to such Restricted Stock Unit or a Performance Unit and to receive CommonStock or cash at such later time or times, all on such terms and conditions as the Committee shalldetermine. The Committee shall not permit the deferral of an Award unless counsel for Spheriondetermines that such action will not result in adverse tax consequences to a Participant underSection 409A of the Code. If any such deferrals are permitted, then notwithstanding anything tothe contrary herein, a Participant who elects to defer receipt of Common Stock shall not have anyrights as a stockholder with respect to deferred shares of Common Stock unless and until shares ofCommon Stock are actually delivered to the Participant with respect thereto, except to the extentotherwise determined by the Committee.
(e) Prospective Employees. Notwithstanding anything to the contrary, any Awardgranted to a Prospective Employee shall not become vested prior to the date the ProspectiveEmployee first becomes an employee of the Company.
(f) Issuance of Certificates; Stockholder Rights. Spherion shall deliver to theParticipant a certificate evidencing the Participants ownership of shares of Common Stock issuedpursuant to the exercise of an Award as soon as administratively practicable after satisfaction ofall conditions relating to the issuance of such shares. A Participant shall not have any of therights of a stockholder with respect to such Common Stock prior to satisfaction of all conditionsrelating to the issuance of such Common Stock, and, except as expressly provided in the Plan, noadjustment shall be made for dividends, distributions or other rights of any kind for which therecord date is prior to the date on which all such conditions have been satisfied. The Committeein its absolute and sole discretion may credit a Participants Award with Dividend Equivalents withrespect to any Awards. To the extent that dividends and distributions relating to an Award areheld in escrow by the Company, or Dividend Equivalents are credited to an Award, a Participantshall not be entitled to any interest on any such amounts. The Committee may not grant DividendEquivalents to an Award subject to performance-based vesting to the extent the grant of suchDividend Equivalents would limit the Companys deduction of the compensation payable under suchAward for Federal tax purposes pursuant to Code Section 162(m).
(g) Transferability of Awards. A Participant may not Transfer an Award other than bywill or the laws of descent and distribution. Awards may be exercised during the Participantslifetime only by the Participant. No Award shall be liable for or subject to the debts, contracts,or liabilities of any Participant, nor shall any Award be subject to legal process or attachmentfor or against such person. Any purported Transfer of an Award in contravention of
the provisions of the Plan shall have no force or effect and shall be null and void, and thepurported transferee of such Award shall not acquire any rights with respect to such Award.Notwithstanding anything to the contrary, the Committee may in its sole and absolute discretionpermit the Transfer of an Award to a Participants family member as such term is defined in theForm 8 Registration Statement under the Securities Act of 1933, under such terms and conditions asspecified by the Committee. In such case, such Award shall be exercisable only by the transfereeapproved of by the Committee. To the extent that the Committee permits the Transfer of anIncentive Stock Option to a family member, so that such Option fails to continue to satisfy therequirements of an incentive stock option under the Code such Option shall automatically bere-designated as a Non-Qualified Stock Option.
(h) Buyout and Settlement Provisions. Except as prohibited in Section 7(d) of thePlan, the Committee may at any time on behalf of Spherion offer to buy out any Awards previouslygranted based on such terms and conditions as the Committee shall determine which shall becommunicated to the Participants at the time such offer is made.
(i) Use of Proceeds. The proceeds received by Spherion from the sale of Common Stockpursuant to Awards granted under the Plan shall constitute general funds of Spherion.
(j) Modification or Substitution of an Award. Subject to the terms and conditions ofthe Plan, the Committee may modify outstanding Awards. Notwithstanding the following, nomodification of an Award shall adversely affect any rights or obligations of the Participant underthe applicable Award Agreement without the Participants consent. The Committee in its sole andabsolute discretion may rescind, modify, or waive any vesting requirements or other conditionsapplicable to an Award. Notwithstanding the foregoing, without approval of the stockholders ofSpherion, an Award may not be modified to reduce the exercise price thereof nor may an Award at alower price be substituted for a surrender of an Award, provided that (i) the foregoing shall notapply to adjustments or substitutions in accordance with Section 6 or Section 12, and (ii) if anAward is modified, extended or renewed and thereby deemed to be in issuance of a new Award underthe Code or the applicable accounting rules, the exercise price of such Award may continue to bethe original Exercise Price even if less than Fair Market Value of the Common Stock at the time ofsuch modification, extension or renewal.
(k) Amendment and Termination of Plan. The Board may, at any time and from time totime, amend, suspend or terminate the Plan as to any shares of Common Stock as to which Awards havenot been granted; provided, however, that the approval by a majority of the votes present andentitled to vote at a duly held meeting of the stockholders of Spherion at which a quorumrepresenting a majority of all outstanding voting stock is, either in person or by proxy, presentand voting on the amendment, or by written consent in accordance with applicable state law and theCertificate of Incorporation and By-Laws of Spherion shall be required for any amendment (i) thatchanges the class of individuals eligible to receive Awards under the Plan, (ii) that increases themaximum number of shares of Common Stock in the aggregate that may be subject to Awards that aregranted under the Plan (except as permitted under Section 6 or Section
12 hereof), (iii) if approval of such amendment is necessary to comply with federal or statelaw (including without limitation Section 162(m) of the Code and Rule 16b-3 under the Exchange Act)or with the rules of any stock exchange or automated quotation system on which the Common Stock maybe listed or traded, (iv) if such amendment is a material amendment to the Plan, or (iv) if suchamendment eliminates a requirement provided herein that the stockholders of Spherion must approvean action to be undertaken under the Plan. Except as permitted under Section 6 or Section 12hereof, no amendment, suspension or termination of the Plan shall, without the consent of theholder of an Award, alter or impair rights or obligations under any Award theretofore granted underthe Plan. Awards granted prior to the termination of the Plan may extend beyond the date the Planis terminated and shall continue subject to the terms of the Plan as in effect on the date the Planis terminated.
(l) Section 409A of the Code. With respect to Awards subject to Section 409A of theCode, this Plan is intended to comply with the requirements of such Section, and the provisionshereof shall be interpreted in a manner that satisfies the requirements of such Section and therelated regulations, and the Plan shall be operated accordingly. If any provision of this Plan orany term or condition of any Award would otherwise frustrate or conflict with this intent, theprovision, term or condition will be interpreted and deemed amended so as to avoid this conflict.
(m) Notification of 83(b) Election. If in connection with the grant of any Award anyParticipant makes an election permitted under Code Section 83(b), such Participant must notify theCompany in writing of such election within ten (10) days of filing such election with the InternalRevenue Service.
(n) Detrimental Activity. All Awards shall be subject to cancellation by theCommittee if the Participant engages in any Detrimental Activity. To the extent that a Participantengages in any Detrimental Activity prior to, or during the one year period after, any exercise orvesting of an Award but prior to a Change in Control, the Company shall be entitled to recover fromthe Participant at any time within two (2) years after the exercise or vesting of the Award butprior to a Change in Control, and the Participant shall pay over to the Company with respect to anyAward previously held by such Participant (i) an amount equal to the excess of the Fair MarketValue of the Common Stock for which any Option was exercised over the Exercise Price paid(regardless of the form by which payment was made) with respect to such Option; (ii) any shares ofCommon Stock granted pursuant to any Award other than an Option, and if such shares are not stillowned by the Participant, the Fair Market Value of such shares on the date they were issued, or iflater, the date all vesting restrictions were satisfied; and (iii) any cash or other property(other than Common Stock) received by the Participant from the Company pursuant to an Award.
(o) Disclaimer of Rights. No provision in the Plan, any Award granted or any AwardAgreement entered into pursuant to the Plan shall be construed to confer upon any individual theright to remain in the employ of or service with the Company or to interfere in any way with theright and authority of the Company either to increase or decrease the compensation of anyindividual, including any holder of an Award, at any time, or to terminate any employment
or other relationship between any individual and the Company. The grant of an Award pursuantto the Plan shall not affect or limit in any way the right or power of the Company to makeadjustments, reclassifications, reorganizations or changes of its capital or business structure orto merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of itsbusiness or assets.
(p) Unfunded Status of Plan. The Plan is intended to constitute an unfunded planfor incentive and deferred compensation. With respect to any payments as to which a Participanthas a fixed and vested interest but which are not yet made to such Participant by the Company,nothing contained herein shall give any such Participant any rights that are greater than those ofa general creditor of the Company.
(q) Nonexclusivity of Plan. The adoption of the Plan shall not be construed ascreating any limitations upon the right and authority of the Board to adopt such other incentivecompensation arrangements (which arrangements may be applicable either generally to a class orclasses of individuals or specifically to a particular individual or individuals) as the Board inits discretion determines desirable.
(r) Other Benefits. No Award payment under the Plan shall be deemed compensation forpurposes of computing benefits under any retirement plan of the Company or any agreement between aParticipant and the Company, nor affect any benefits under any other benefit plan of the Companynow or subsequently in effect under which benefits are based upon a Participants level ofcompensation.
(s) Headings. The section headings in the Plan are for convenience only; they form nopart of this Agreement and shall not affect its interpretation.
(t) Pronouns. The use of any gender in the Plan shall be deemed to include allgenders, and the use of the singular shall be deemed to include the plural and vice versa, whereverit appears appropriate from the context.
(u) Successors and Assigns. The Plan shall be binding on all successors of theCompany and all successors and permitted assigns of a Participant, including, but not limited to, aParticipants estate, devisee, or heir at law.
(v) Severability. If any provision of the Plan or any Award Agreement shall bedetermined to be illegal or unenforceable by any court of law in any jurisdiction, the remainingprovisions hereof and thereof shall be severable and enforceable in accordance with their terms,and all provisions shall remain enforceable in any other jurisdiction.
(w) Notices. Any communication or notice required or permitted to be given under thePlan shall be in writing, and mailed by registered or certified mail or delivered by hand, toSpherion, to its principal place of business, attention: Treasury Department, and if to the holderof an Award, to the address as appearing on the records of the Company.