1998 REMEDYTEMP, INC.
Exhibit 10.24
1998 REMEDYTEMP, INC.
AMENDED AND RESTATED DEFERRED COMPENSATION AND
STOCK OWNERSHIP PLAN
FOR OUTSIDE DIRECTORS
(Amended and Restated Effective As of October 1, 2003)
TABLE OF CONTENTS
1998 REMEDYTEMP, INC.
AMENDED AND RESTATED DEFERRED COMPENSATION AND STOCK
OWNERSHIP PLAN
FOR OUTSIDE DIRECTORS
(Amended and Restated Effective As of October 1, 2003)
PAGE | ||||
Article 1. | Establishment and Purpose | 1 | ||
Article 2. | Administration | 1 | ||
Article 3. | Participation in the Plan | 2 | ||
Article 4. | Stock Subject to the Plan | 2 | ||
Article 5. | Deferral of Retainer Fees | 3 | ||
Article 6. | Deferral Procedures | 3 | ||
Article 7. | Deferred Compensation Accounts | 5 | ||
Article 8. | Rights of Participants | 6 | ||
Article 9. | Securities Laws | 6 | ||
Article 10. | Withholding Taxes | 7 | ||
Article 11. | Amendment and Termination of the Plan | 7 | ||
Article 12. | Effective Date and Duration of the Plan | 7 | ||
Article 13. | Miscellaneous | 7 | ||
DEFERRAL ELECTION FORM | ||||
DESIGNATION OF BENEFICIARY FORM |
1998 REMEDYTEMP, INC.
AMDENDED AND RESTATED DEFERRED COMPENSATION
AND STOCK OWNERSHIP PLAN
FOR OUTSIDE DIRECTORS
(Amended and Restated Effective As of October 1, 2003)
Article 1. Establishment and Purpose.
1.1 Establishment. RemedyTemp, Inc., a California corporation (the Company), established, effective as of March 16, 1998 (the Effective Date), this director pay and deferred compensation plan, which shall be known as the 1998 RemedyTemp, Inc. Deferred Compensation and Stock Ownership Plan for Outside Directors (the Plan), for present and future members of the board of directors of the Company (the Board) who are not employees or officers of the Company. The Plan was amended, upon shareholder approval effective February 27, 2003, to increase the aggregate number of shares of the Companys Class A Common Stock, par value $.01 per share, that may be issued under the Plan and was amended and restated, effective as of October 1, 2003, to allow participants in the Plan the option to receive all of the Retainer Fees (as defined below) in Stock on a deferral basis.
1.2 Purpose. The purposes of the Plan are (i) to provide members of the Board who are not employees or officers of the Company with the opportunity to receive all of their Retainer Fees (as defined below) in the form of the Companys Class A Common Stock, par value $.01 per share (Stock) on a deferral basis, subject to the terms of the Plan and (ii) to advance the interests of the Company and its shareholders by increasing the Stock ownership of the Companys non-employee directors thereby aligning their interests more closely with the interests of the Companys other shareholders. By adopting the Plan, the Company desires to enhance its ability to attract and retain members of the Board (Directors) of outstanding competence.
Article 2. Administration.
2.1 Authority of the Board. The Plan shall be administered by the full Board, and to the extent permissible under Section 16 of the Securities Exchange Act of 1934, as amended, the Board may delegate ministerial duties to the Chief Human Resources Officer or any other executive or executives of the Company. The Board shall have the power to construe the Plan, to resolve all questions arising under the Plan, to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable, and otherwise to carry out the terms of the Plan. Neither the Board nor any officer or employee thereof shall be liable for any action or determination taken or made under the Plan in good faith. Notwithstanding the foregoing, the Board shall have no authority or discretion as to the persons who will participate in the Plan, the number of shares of Stock to be issued under the Plan, the time at which such grants are made, the number of shares of Stock to be granted at any particular time, or any other matters that are specifically governed by the provisions of the Plan.
2.2 Decisions Binding. The determinations, interpretations, and other actions of the Board of or under the Plan shall be final and binding for all purposes and on all persons.
2.3 Arbitration. Any individual making a claim for benefits under this Plan may contest the Boards decision to deny such claim or appeal therefrom only by submitting the matter to binding arbitration before a single arbitrator. Any arbitration shall be held in Orange
County, California, unless otherwise agreed to by the Board. The arbitration shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association.
The arbitrators authority shall be limited to the affirmation or reversal of the Boards denial of the claim or appeal, and the arbitrator shall have no power to alter, add to, or subtract from any provision of this Plan. Each party shall bear its own attorneys fees and costs of arbitration. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
2.4 Indemnification. Each person who is or shall have been a member of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a defendant, or in which he or she may be a party by reason of any act or omission by such Board member in his or her capacity as an administrator of the Plan, and against and from any and all amounts paid by him or her in settlement thereof, with the Companys approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights or indemnification to which such persons may be entitled under the Companys Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
Article 3. Participation in the Plan.
Directors of the Company who are not employees or officers of the Company or any subsidiary of the Company (Eligible Directors) may participate in the Plan. Each Eligible Director may enter into an agreement with the Company in such form as the Company shall determine consistent with the provisions of the Plan for purposes of implementing the Plan or effecting its purposes. In the event of any inconsistency between the provisions of the Plan and any such agreement, the provisions of the Plan shall govern. In the event an Eligible Director no longer meets the requirements for participation in the Plan, such Eligible Director shall become an inactive Eligible Director, retaining all the rights described under the Plan, until such time that the Eligible Director again becomes an active Eligible Director.
Article 4. Stock Subject to the Plan.
4.1 Number of Shares. The shares that may be issued under the Plan shall be authorized and unissued shares of the Companys Stock. The maximum aggregate number of shares that may be issued under the Plan shall be seventy-five thousand (75,000), subject to adjustment upon changes in capitalization of the Company as provided in Article 4.2. The maximum aggregate number of shares issuable under the Plan may be increased from time to time by approval of the Board, and by the shareholders of the Company if shareholder approval is required pursuant to the applicable rules of any stock exchange, or, in the opinion of the Companys counsel, any other law or regulation binding upon the Company.
4.2 Adjustments. If the Company shall at any time increase or decrease the number of its issued and outstanding shares of Stock (whether by reason of reorganization, merger, consolidation, recapitalization, stock dividend, stock split, combination of shares, exchange of shares, change in corporate structure, or otherwise), then the number of shares of Stock still available for issue hereunder shall be increased or decreased appropriately and proportionately.
Article 5. Deferral of Retainer Fees.
5.1 Payment of Fees. An Eligible Director may, upon his or her election in accordance with procedures established by the Company, elect to defer his or her annual cash retainer fees (annual amount and pro-rata portions thereof for partial years of directorship are set by the Board) paid to such Director for serving as a member of the Board (Retainer Fees), under the Plan, subject to the terms and conditions set forth in this Article 5 (Deferred Amounts). All other fees received by Eligible Directors from the Company, including his or her fees normally paid to a Director on a per meeting basis for attending a meeting of the Board or a committee thereof (Meeting Fees) are not subject to the terms of this Plan.
5.2 Deemed Investment of Deferred Amounts.
5.2.1 Deemed Investments of Deferred Amounts. Deferred Amounts shall be deemed to be invested in Stock. Such amounts shall be deemed to be credited to the Eligible Directors account under the Plan as of the date the Retainer Fees otherwise would have been payable to the Eligible Director in cash. The Eligible Directors account shall be deemed to hold the number of shares of Stock determined by dividing the Deferred Amount by the Fair Market Value of the Stock on the date the amount is deemed to be credited to the Eligible Directors account.
5.2.2 Fair Market Value. For the purposes of the Plan, the Fair Market Value of the Stock as of any issuance or deferral date shall be the mean between the highest and lowest sales price of the Stock on the New York Stock Exchange (or another national stock exchange or the NASDAQ National Market System, if the Stock trades thereon but not on the NYSE) as of such date (or, if no such shares were traded on such date, as of the next preceding day on which there was such a trade, provided that the closing price on such preceding date is not less than 100% of the fair market value of the Stock, as determined in good faith by the Company, on the date of issuance). If at any time the Stock is no longer traded on a national stock exchange or the NASDAQ National Market System, the Fair Market Value of the Stock as of any issuance date shall be as determined by the Company in good faith in the exercise of its reasonable discretion.
5.3 Rights of the Eligible Director. Except as otherwise provided under this Plan and that certain Trust Agreement (if any) of even date herewith entered into by and among the Company and the Trustees with respect to the Plan, an Eligible Director shall, with respect to shares of Stock deemed to be held under such Eligible Directors account, have all of the rights of a holder of the Stock, including the right to receive dividends paid on such Stock and the right to vote the Stock at meetings of shareholders of the Company. Upon delivery, such Stock will be nonforfeitable.
Article 6. Deferral Procedures.
6.1 Deferral of Retainer Fees. If an Eligible Director elects to defer Retainer Fees under the Plan, such election shall automatically remain in effect for all periods the Eligible Director remains a Director until changed by the Eligible Director pursuant to procedures established by the Committee. All Retainer Fees deferred under the Plan shall be deemed to be invested as set forth in Article 5.2 hereof.
6.2 Payment Form of Deferred Amounts. Subject to Article 6.3, Eligible Directors shall be entitled to elect to receive distribution of all the Deferred Amounts at the end of the deferral period in a single lump distribution. Such distribution shall be in the form of Stock. In lieu of a lump sum distribution, the Eligible Director may elect to receive distributions under the Plan by means of installments. If no effective election is made, the Eligible Director
will be paid in a single lump distribution. For all Eligible Directors as of the Effective Date, elections to receive distributions in annual installments rather than in one lump distribution, shall be made by completing a Deferral Election Form within thirty (30) calendar days after the Effective Date. Otherwise, those persons becoming Eligible Directors after the Effective Date shall complete a Deferral Election Form not later than thirty (30) calendar days upon becoming an Eligible Director under the Plan.
6.2.1 One Lump Distribution. Unless otherwise elected on a Deferral Election Form, all Deferred Amounts under the Plan shall be distributed in a single transaction made to the Eligible Director in January following the year in which he or she ceases to serve as a Director for any reason (a Distribution Date, which shall also mean the date any installment payment is paid pursuant to Article 6.2.2).
6.2.2 Installment Distributions. Eligible Directors may elect to receive the distribution of Deferred Amounts in annual installments, with a minimum number of installments of two (2), and a maximum number of installments of ten (10) by completing a Deferral Election Form as provided in Article 6.2. The initial distribution shall be made in January following the year in which he or she ceases to serve as a Director for any reason. The remaining installment distributions shall be made in January of each year thereafter until the Eligible Directors entire deferred account has been distributed in full. The amount of each installment distribution shall be determined immediately prior to each such payment and shall equal the number of Shares credited to the Eligible Directors account, multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the number of installment payments remaining.
Subject to the following rules, Eligible Directors shall be permitted to change the form of elected deferral distribution pursuant to this Article 6 from a single distribution to installment distributions (Permitted Change), but not from installment distribution to a single distribution. A Permitted Change shall be made by filing a revised election form on an Deferral Election Form as described in Article 6.2 herein, specifying the new form of distribution provided that:
(1) An election to change the form of distribution must be made no later than December 31 at least one (1) full year prior to the distribution commencement date as described in Article 6.2 herein. If a new election is submitted after this date, the election shall be null and void, and the form of distribution shall be determined under the Eligible Directors original election; and
(2) No further election to change a form of distribution shall be permitted with respect to Deferred Amounts already subject to a revised election submitted pursuant to this Article 6.
Notwithstanding anything to the contrary herein, the Board may elect at any time, in its sole and absolute discretion, to make distribution of the Deferred Amount to the Eligible Director in a single lump distribution, notwithstanding the Eligible Directors election to receive such Deferred Amount in the form of installments.
6.3 Financial Hardship. The Board shall have the authority to alter the timing or manner of payment of Deferred Amounts in the event that the Eligible Director establishes, to the satisfaction of the Board, severe financial hardship. In such event, the Board may, in its sole discretion:
(a) Authorize the cessation of deferrals by such Eligible Director under the Plan; or
(b) Provide that all, or a portion, of the shares of Deferred Amounts shall immediately be paid to the Eligible Director in a lump sum payment of Stock.
For purposes of this Article 6.3 severe financial hardship shall mean any financial hardship resulting from extraordinary and unforseeable circumstances arising as a result of one or more recent events beyond the control of the Eligible Director. In any event, payment may not be made to the extent such emergency is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise; (ii) by liquidation of the Eligible Directors assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or (iii) by cessation of deferrals under the Plan. Withdrawals of amounts because of a severe financial hardship may only be permitted to the extent reasonably necessary to satisfy the hardship, plus to pay taxes on the withdrawal. Examples of what are not considered to be severe financial hardships include the need to send an Eligible Directors child to college or the desire to purchase a home. The Eligible Directors account will be credited with earnings in accordance with the Plan up to the date of distribution. The severity of the financial hardship shall be judged by the Board. The Boards decision with respect to the severity of financial hardship and the manner in which, if at all, the Eligible Directors future deferral opportunities shall be ceased, and/or the manner in which, if at all, the payment of deferred amounts to the Eligible Director shall be altered or modified, shall be final, conclusive, and not subject to appeal.
6.4 Plan Shares. All shares of Stock issued or issuable under the Plan shall be deducted from the shares available under the Plan at the time first issued and deferred under the Plan, provided that shares deferred and not ultimately issued and delivered to the Eligible Director shall be returned to the pool of available shares under the Plan.
Article 7. Deferred Compensation Accounts.
7.1 Eligible Directors Accounts. The Company shall establish and maintain an individual bookkeeping account for the Deferred Amounts of each Eligible Director under Article 6 herein. Each account shall be credited as of the date the amount deferred otherwise would have become due and payable to the Eligible Director and as provided in Article 7.2. Each Eligible Directors account shall be one hundred percent (100%) vested at all times.
7.2 Dividends on Stock. Any dividends paid on the deferred Stock, if any, shall be paid to the Eligible Director in Stock (without interest) not later than ten (10) days after the date such dividend payment on the Stock was made.
7.3 Charges Against Accounts. There shall be charged against each Eligible Directors deferred account any distributions made to the Eligible Director or to his or her beneficiary.
7.4 Designation of Beneficiary. Each Eligible Director shall designate a beneficiary or beneficiaries who, upon the Eligible Directors death, will receive the Deferred Amount that otherwise would have been paid to the Eligible Director under the Plan. All designations shall be signed by the Eligible Director, and shall be in such form as prescribed by the Board. Each designation shall be effective as of the date delivered to the Chief Human Resources Officer of the Company prior to the Eligible Directors death. In the event that all the beneficiaries named by an Eligible Director pursuant to this Article 7.4 predecease the Eligible Director, the Deferred Amount that would have been paid to the Eligible Director or the Eligible Directors beneficiaries shall be paid to the Eligible Directors estate. In the event an Eligible Director does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the Deferred Amount that otherwise would have been paid to the Eligible Director or the Eligible Directors beneficiaries under the Plan shall be paid to the Eligible Directors estate.
Article 8. Rights of Participants.
8.1 Contractual Obligation. The Plan shall create a contractual obligation on the part of the Company to make payments from the Eligible Directors accounts when due. Payment of account balances shall be made out of the general funds of the Company.
8.2 Unsecured Interest. No Eligible Director or party claiming an interest in deferred amounts of an Eligible Director shall have any interest whatsoever in any specific asset of the Company. To the extent that any party acquires a right to receive payments under the Plan, such right shall be equivalent to that of an unsecured general creditor of the Company. The Company shall have no duty to set aside or invest any amounts credited to Eligible Directors account under the Plan.
Nothing in this Plan shall create a trust of any kind or a fiduciary relationship between the Company and any Eligible Director. Nevertheless, the Company may establish one or more trusts, with such trustee as the Board may approve, for the purpose of providing for the payment of deferred amounts and earnings thereon. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Companys general creditors in the event of the Companys bankruptcy or insolvency. To the extent any deferred amounts and earnings thereon under the Plan are actually paid from any such trust, the Company shall have no further obligation with respect thereto, but to the extent not so paid, such deferred amounts and earnings thereon shall remain the obligation of, and shall be paid by, the Company.
8.3 No Guarantee of Principal or Earnings. Nothing contained in the Plan shall constitute a guarantee by the Company or any other person or entity that the amounts deferred hereunder will increase or shall not decrease in value due to the deemed investment of such amounts in Stock. Stock may be a volatile investment and decreases in the value thereof may result in a loss of some or all of the principal amounts deferred hereunder. Thus, it is possible for the value of an Eligible Directors account to decrease as a result of its investment in Stock, if the value of the Stock decreases.
Article 9. Securities Laws.
9.1 Investment Representations. The Company may require any Eligible Director to whom an issuance of securities is made, or a deferred delivery obligation is undertaken, as a condition of receiving securities pursuant to such issuance or obligation, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the securities for his/her own account for investment and not with any present intention of selling or otherwise distributing the same in violation of applicable securities laws, and to such other effects as the Company deems necessary or appropriate to comply with Federal and applicable state securities laws.
9.2 Listing, Registration, and Qualification. Anything to the contrary herein notwithstanding, each issuance of securities shall be subject to the requirement that, if at any time the Company or its counsel shall determine that the listing, registration, or qualification of the securities subject to such issuance upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary or advisable as a condition of, or in connection with, such issuance of securities, such issuance shall not occur in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained on conditions acceptable to the Company. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration, or qualification.
9.3 Restrictions on Transfer. The securities issued under the Plan shall be restricted by the Company as to transfer unless the grants are made under a registration statement that is effective under the Securities Act of 1933, as amended, or unless the Company receives an opinion of counsel satisfactory to the Company to the effect that registration under state or federal securities laws is not required with respect to such transfer.
Article 10. Withholding Taxes.
Whenever shares of Stock are to be issued under the Plan, the Company shall have the right prior to the delivery of any certificate or certificates for such shares to require the recipient to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements (if any) attributable to the issuance. In the absence of payment by a grantee to the Company of an amount sufficient to satisfy such withholding taxes, or an alternative arrangement with the grantee that is satisfactory to the Company, the Company may make such provisions as it deems appropriate for the withholding of any such taxes which the Company determines it is required to withhold.
Article 11. Amendment and Termination of the Plan.
The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time-to-time in any respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendment shall be effective without approval of the shareholders of the Company if shareholder approval of the amendment is then required pursuant to the applicable rules of any securities exchange, or, in the opinion of the Companys counsel, any other law or regulation binding on the Company.
Article 12. Effective Date and Duration of the Plan.
The Plan shall become effective at the time that it is approved by the Board. The Plan shall terminate at 11:59 p.m. on December 31, 2008, unless sooner terminated or extended by action of the Board. Elections may be made under the Plan prior to its effectiveness, but no issuances under the Plan shall be made before its effectiveness or after its termination (except with respect to Deferred Amounts previously deferred under the Plan).
Article 13. Miscellaneous.
13.1 Notice. Unless otherwise prescribed by the Board, any notice or filing required or permitted to be given to the Company under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail to the Chief Human Resources Officer of the Company. Notice to the Chief Human Resources Officer of the Company, if mailed, shall be addressed to the principal executive offices of the Company. Notice mailed to an Eligible Director shall be at such address as is given in the records of the Company. Notices shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
13.2 No Shareholder Rights Conferred. Nothing contained in the Plan or any agreement hereunder will confer upon any director any rights of a shareholder of the Company unless and until shares of Stock are issued to such Eligible Director upon the payment of Stock.
13.3 Granted Shares Have Same Status as Issued Shares. Any shares of Stock of the Company issued as a stock dividend, or as a result of stock splits, combinations, exchanges of shares, reorganizations, mergers, consolidations or otherwise with respect to shares of Stock granted pursuant to the Plan shall have the same status and be subject to the same restrictions as the shares granted.
13.4 No Right to Stock. Nothing in the Plan shall be construed to give any Director of the Company any right to a grant of Stock under the Plan unless all conditions described within the Plan are met as determined in the sole discretion of the Board.
13.5 Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
13.6 Costs of the Plan. All costs of implementing and administering the Plan shall be borne by the Company.
13.7 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
13.8 Applicable Law. The Plan and all rights and obligations under the Plan shall be construed in accordance with and governed by the laws of the State of California, excluding its conflicts of laws principles.
13.9 Nontransferability. Eligible Directors rights to deferred amounts, contributions, and earnings accrued thereon under the Plan may not be sold, transferred, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, nor shall the company make any payment under the Plan to any assignee or creditor of an Eligible Director or other person based upon community or other marital rights except in accordance with the terms of the Plan.