Exhibit 10.4

 

 

 

NONQUALIFIED STOCK OPTION AGREEMENT

STAFFING 360 SOLUTIONS, INC.

2020 OMNIBUS INCENTIVE PLAN  

1.Grant of Option.  Pursuant to the Staffing 360 Solutions, Inc. Omnibus
Incentive Plan (the “Plan”) for Employees, Contractors, and Outside Directors of
Staffing 360 Solutions, Inc., a Delaware corporation (the “Company”), the
Company grants to

 

(the “Participant”)

an option (the “Stock Option”) to purchase a total of ___________________
(__________) full shares of Common Stock of the Company (the “Optioned Shares”)
at an “Option Price” equal to $________ per share (being the Fair Market Value
per share of the Common Stock on the Date of Grant).

The “Date of Grant” of this Stock Option is _________________, 2020.  The
“Option Period” shall commence on the Date of Grant and shall expire on the date
immediately preceding the tenth (10th) anniversary of the Date of Grant, unless
terminated earlier in accordance with Section 4 below.  The Stock Option is a
Nonqualified Stock Option that is intended to comply with the provisions
governing nonqualified stock options under the final Treasury Regulations issued
on April 17, 2007, in order to exempt this Stock Option from application of
Section 409A of the Code.

2.Subject to Plan.  The Stock Option and its exercise are subject to the terms
and conditions of the Plan, and the terms of the Plan shall control to the
extent not otherwise inconsistent with the provisions of this Nonqualified Stock
Option Agreement (this “Agreement”).  The capitalized terms used herein that are
defined in the Plan shall have the same meanings assigned to them in the
Plan.  The Stock Option is subject to any rules promulgated pursuant to the Plan
by the Board or the Committee, as applicable, and communicated to the
Participant in writing.  

3.Vesting; Time of Exercise.  Except as specifically provided in this Agreement
and subject to certain restrictions and conditions set forth in the Plan, the
Optioned Shares shall be vested and the Stock Option shall be exercisable as
follows:  

a._______________________ of the total Optioned Shares shall vest and that
portion of the Stock Option shall be exercisable on the Date of Grant.

b._______________________ of the total Optioned Shares shall vest and that
portion of the Stock Option shall become exercisable on __________________,
provided the Participant is employed by (or, if the Participant is a Contractor
or an Outside Director, is providing services to) the Company or a Subsidiary on
that date.

c._______________________ of the total Optioned Shares shall vest and that
portion of the Stock Option shall become exercisable on __________________,
provided the Participant is employed by (or, if the Participant is a Contractor
or an Outside Director, is providing services to) the Company or a Subsidiary on
that date.

 

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d._______________________ of the total Optioned Shares shall vest and that
portion of the Stock Option shall become exercisable on __________________,
provided the Participant is employed by (or, if the Participant is a Contractor
or an Outside Director, is providing services to) the Company or a Subsidiary on
that date.

[In the event that (i) a Change in Control occurs, and (ii) this Option
Agreement is not assumed by the surviving corporation or its parent, or the
surviving corporation or its parent does not substitute its own option for this
Stock Option, then immediately prior to the effective date of such Change in
Control, the total Optioned Shares not previously vested shall thereupon
immediately become vested and this Stock Option shall become fully exercisable,
if not previously so exercisable.]

4.Term; Forfeiture.

a.

Except as otherwise provided in this Agreement, to the extent the unexercised
portion of the Stock Option relates to Optioned Shares that are not vested on
the date of the Participant’s Termination of Service, the Stock Option will be
terminated on that date.  The unexercised portion of the Stock Option that
relates to Optioned Shares which are vested on such date will terminate at the
first of the following to occur:

i.5 p.m. on the date the Option Period terminates;

ii.5 p.m. on the date which is twelve (12) months following the date of the
Participant’s Termination of Service due to death or Total and Permanent
Disability;

iii.immediately upon the Participant’s Termination of Service by the Company for
Cause (as defined herein);

iv.5 p.m. on the date which is ninety (90) days following the date of the
Participant’s Termination of Service for any reason not otherwise specified in
this Section 4.a.; or

v.5 p.m. on the date the Company causes any portion of the Stock Option to be
forfeited pursuant to Section 7 hereof.

b.For purposes hereof, “Cause” shall have the meaning ascribed to such term in
any employment, consulting, or other service agreement in effect by and between
the Company and the Participant; provided, however, at any time there is no such
agreement in effect, or if such agreement does not define such term, the term
“Cause” shall mean (i) the Participant’s commission of a dishonest or fraudulent
act in connection with the Participant’s employment, or the misappropriation of
Company property; (ii) the Participant’s conviction of, or plea of nolo
contendere to, a felony or crime involving dishonesty; (iii) the Participant’s
inattention to duties, unsatisfactory performance, or failure to perform the
Participant’s duties hereunder, provided in each case the Company gives the
Participant written notice and thirty (30) days to correct the Participant’s
performance to the Company’s satisfaction; (iv) a substantial failure to comply
with the Company’s policies; (v) a material and willful breach of the
Participant’s fiduciary duties in any material respect, provided in each case
the Company gives the Participant written notice and thirty (30) days to correct
such breach; (vi) the Participant’s failure to comply in any material respect
with any legal written directive of the Board; or (vii) any act or omission of
the Participant which is of substantial detriment to the Company because of the
Participant’s intentional failure to comply with any statute, rule or
regulation, except any act or omission believed by the Participant

 

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in good faith to have been in or not opposed to the best interest of the Company
(without the intent of the Participant to gain, directly or indirectly, a profit
to which the Participant was not legally entitled).  Any determination of
whether the Participant should be terminated for Cause pursuant to this
Agreement shall be made in the sole, good faith discretion of the Board, and
shall be binding upon all parties affected thereby.

5.Who May Exercise.  Subject to the terms and conditions set forth in Sections 3
and 4 above, during the lifetime of the Participant, the Stock Option may be
exercised only by the Participant, or by the Participant’s guardian or personal
or legal representative.  If the Participant’s Termination of Service is due to
his death prior to the dates specified in Section 4.a. hereof, and the
Participant has not exercised the Stock Option as to the maximum number of
vested Optioned Shares as set forth in Section 3 hereof as of the date of death,
the following persons may exercise the exercisable portion of the Stock Option
on behalf of the Participant at any time prior to the earliest of the dates
specified in Section 4.a. hereof: the personal representative of his estate or
the person who acquired the right to exercise the Stock Option by bequest or
inheritance or by reason of the death of the Participant, provided that the
Stock Option shall remain subject to the other terms of this Agreement, the
Plan, and all Applicable Laws, rules, and regulations.

6.No Fractional Shares.  The Stock Option may be exercised only with respect to
full shares, and no fractional share of stock shall be issued.

7.Manner of Exercise.  Subject to such administrative regulations as the
Committee may from time to time adopt, the Stock Option may be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Common Stock with respect to which the Stock Option is to be exercised and
the date of exercise thereof (the “Exercise Date”), which shall be at least
three (3) days after giving such notice unless an earlier time shall have been
mutually agreed upon.  On the Exercise Date, the Participant shall deliver to
the Company consideration with a value equal to the total Option Price of the
shares to be purchased, payable as follows:  (a) cash, check, bank draft, or
money order payable to the order of the Company; (b) if the Company, in its sole
discretion, so consents in writing, Common Stock owned by the Participant on the
Exercise Date, valued at its Fair Market Value on the Exercise Date, and which
the Participant has not acquired from the Company within six (6) months prior to
the Exercise Date; (c) if the Company, in its sole discretion, so consents in
writing, by delivery (including by FAX) to the Company or its designated agent
of an executed irrevocable option exercise form together with irrevocable
instructions from the Participant to a broker or dealer, reasonably acceptable
to the Company, to sell certain of the shares of Common Stock purchased upon
exercise of the Stock Option or to pledge such shares as collateral for a loan
and promptly deliver to the Company the amount of sale or loan proceeds
necessary to pay such purchase price; (d) by requesting the Company to withhold
the number of shares otherwise deliverable upon exercise of the Stock Option by
the number of shares of Common Stock having an aggregate Fair Market Value equal
to the aggregate Option Price at the time of exercise (i.e., a cashless net
exercise), and/or (e) in any other form of valid consideration that is
acceptable to the Committee in its sole discretion.

Upon payment of all amounts due from the Participant, the Company shall cause
the Common Stock then being purchased to be registered in the Participant’s name
(or the person exercising the Participant’s Stock Option in the event of the
Participant’s death) promptly after the Exercise Date.  The obligation of the
Company to register shares of Common Stock shall, however, be subject to the
condition that, if at any time the Company shall determine in its discretion
that the listing, registration, or qualification of the Stock Option or the
Common Stock upon any securities exchange or inter-dealer quotation system or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary as a condition of, or in connection with, the
Stock Option or the issuance or purchase of shares of Common Stock thereunder,
then the Stock Option may not be exercised in whole or in part unless such

 

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listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not reasonably acceptable to the
Committee.

If the Participant fails to pay for any of the Optioned Shares specified in such
notice or fails to accept delivery thereof, that portion of the Participant’s
Stock Option and the right to purchase such Optioned Shares may be forfeited by
the Participant.

8.Nonassignability.  The Stock Option is not assignable or transferable by the
Participant except by will or by the laws of descent and distribution.  

9.Rights as Stockholder.  The Participant will have no rights as a stockholder
with respect to any of the Optioned Shares until the issuance of a certificate
or certificates to the Participant or the registration of such shares in the
Participant’s name for the shares of Common Stock.  The Optioned Shares shall be
subject to the terms and conditions of this Agreement.  Except as otherwise
provided in Section 10 hereof, no adjustment shall be made for dividends or
other rights for which the record date is prior to the issuance of such
certificate or certificates.  The Participant, by his execution of this
Agreement, agrees to execute any documents requested by the Company in
connection with the issuance of the shares of Common Stock.

10.Adjustment of Number of Optioned Shares and Related Matters.  The number of
shares of Common Stock covered by the Stock Option, and the Option Prices
thereof, shall be subject to adjustment in accordance with Articles 11 - 13 of
the Plan.

11.Nonqualified Stock Option.  The Stock Option shall not be treated as an
Incentive Stock Option.

12.Voting.  The Participant, as record holder of some or all of the Optioned
Shares following exercise of this Stock Option, has the exclusive right to vote,
or consent with respect to, such Optioned Shares until such time as the Optioned
Shares are transferred in accordance with this Agreement; provided, however,
that this Section shall not create any voting right where the holders of such
Optioned Shares otherwise have no such right.

13.Specific Performance.  The parties acknowledge that remedies at law will be
inadequate remedies for breach of this Agreement and consequently agree that
this Agreement shall be enforceable by specific performance.  The remedy of
specific performance shall be cumulative of all of the rights and remedies at
law or in equity of the parties under this Agreement.

14.Participant’s Representations.  Notwithstanding any of the provisions hereof,
the Participant hereby agrees that he will not exercise the Stock Option granted
hereby, and that the Company will not be obligated to issue any shares to the
Participant hereunder, if the exercise thereof or the issuance of such shares
shall constitute a violation by the Participant or the Company of any provision
of any law or regulation of any governmental authority.  Any determination in
this connection by the Company shall be final, binding, and conclusive.  The
obligations of the Company and the rights of the Participant are subject to all
Applicable Laws, rules, and regulations.

15.Investment Representation.  Unless the shares of Common Stock are issued to
the Participant in a transaction registered under applicable federal and state
securities laws, by his execution hereof, the Participant represents and
warrants to the Company that all Common Stock which may be purchased hereunder
will be acquired by the Participant for investment purposes for his own account
and not with any intent for resale or distribution in violation of federal or
state securities laws.  Unless the Common Stock is issued to him in a
transaction registered under the applicable federal and state securities

 

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laws, all certificates issued with respect to the Common Stock shall bear an
appropriate restrictive investment legend and shall be held indefinitely, unless
they are subsequently registered under the applicable federal and state
securities laws or the Participant obtains an opinion of counsel, in form and
substance satisfactory to the Company and its counsel, that such registration is
not required.

16.Participant’s Acknowledgments.  The Participant acknowledges that a copy of
the Plan has been made available for his review by the Company and represents
that he is familiar with the terms and provisions thereof, and hereby accepts
this Stock Option subject to all the terms and provisions thereof.  The
Participant hereby agrees to accept as binding, conclusive, and final all
decisions or interpretations of the Committee or the Board, as appropriate, upon
any questions arising under the Plan or this Agreement.

17.Law Governing.  This Agreement shall be governed by, construed, and enforced
in accordance with the laws of the State of Delaware (excluding any conflict of
laws rule or principle of Delaware law that might refer the governance,
construction, or interpretation of this Agreement to the laws of another state).

18.No Right to Continue Service or Employment.  Nothing herein shall be
construed to confer upon the Participant the right to continue in the employ or
to provide services to the Company or any Subsidiary, whether as an Employee,
Contractor, or Outside Director, or to interfere with or restrict in any way the
right of the Company or any Subsidiary to discharge the Participant as an
Employee, Contractor, or Outside Director at any time.

19.Legal Construction.  In the event that any one or more of the terms,
provisions, or agreements that are contained in this Agreement shall be held by
a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect for any reason, the invalid, illegal, or unenforceable term,
provision, or agreement shall not affect any other term, provision, or agreement
that is contained in this Agreement, and this Agreement shall be construed in
all respects as if the invalid, illegal, or unenforceable term, provision, or
agreement had never been contained herein.

20.Covenants and Agreements as Independent Agreements. Each of the covenants and
agreements that is set forth in this Agreement shall be construed as a covenant
and agreement independent of any other provision of this Agreement.  The
existence of any claim or cause of action of the Participant against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants and agreements that
are set forth in this Agreement.

21.Entire Agreement.  This Agreement together with the Plan supersede any and
all other prior understandings and agreements, either oral or in writing,
between the parties with respect to the subject matter hereof and constitute the
sole and only agreements between the parties with respect to the said subject
matter.  All prior negotiations and agreements between the parties with respect
to the subject matter hereof are merged into this Agreement.  Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement or the Plan and
that any agreement, statement, or promise that is not contained in this
Agreement or the Plan shall not be valid or binding or of any force or effect.

22.Parties Bound.  The terms, provisions, and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to the benefit of the
parties and their respective heirs, executors, administrators, legal
representatives, and permitted successors and assigns, subject to the limitation
on assignment expressly set forth herein.  

 

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23.Modification.  No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and
signed by the parties; provided, however, that the Company may change or modify
this Agreement without the Participant’s consent or signature if the Company
determines, in its sole discretion, that such change or modification is
necessary for purposes of compliance with or exemption from the requirements of
Section 409A of the Code or any regulations or other guidance issued
thereunder.  Notwithstanding the preceding sentence, the Company may amend the
Plan to the extent permitted by the Plan.

24.Headings.  The headings that are used in this Agreement are used for
reference and convenience purposes only and do not constitute substantive
matters to be considered in construing the terms and provisions of this
Agreement.

25.Gender and Number.  Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.

26.Notice.  Any notice required or permitted to be delivered hereunder shall be
deemed to be delivered only when actually received by the Company or by the
Participant, as the case may be, at the addresses set forth below, or at such
other addresses as they have theretofore specified by written notice delivered
in accordance herewith:

a.Notice to the Company shall be addressed and delivered as follows:

Staffing 360 Solutions, Inc.

641 Lexington Avenue, 27th Floor

New York, New York  10022

Attn:

Facsimile:

b.Notice to the Participant shall be addressed and delivered as set forth on the
signature page.

27.Clawback.  The Participant acknowledges, understands, and agrees, with
respect to any shares of Common Stock delivered to the Participant (or
registered in the Participant’s name) pursuant to this Agreement, that such
shares of Common Stock shall be subject to recovery by the Company, and the
Participant shall be required to repay such compensation or shares of Common
Stock, in accordance with the Company’s Claw-Back Policy, as in effect from time
to time.  The Participant further acknowledges, understands, and agrees that the
Board retains the right to modify the Company’s Claw-Back Policy at any time.

28.Prospectus.  A prospectus covering the shares of Common Stock offered
pursuant to the Plan and registered under the Securities Act of 1933, as amended
(the “Securities Act”), has been prepared by the Company (the
“Prospectus”).  The Prospectus summarizes and describes the material provisions
of the Plan.  An electronic copy of the Prospectus, the Plan, and any other
documents required to be delivered to the Participant under the Securities Act
or the rules and regulations promulgated thereunder (the “Plan Documents”) are
available via [  ].  Physical copies of the Plan Documents are available upon
written request.  By acceptance of this Award and execution of this Agreement,
the Participant acknowledges and agrees that a copy of the Prospectus and the
other Plan Documents have been made available to him.  The Participant
represents that he is familiar with the terms and provisions of the Prospectus
and the other Plan Documents and hereby accepts the Awarded Units subject to all
the terms and provisions thereof.  The

 

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Participant hereby agrees to accept as binding, conclusive, and final all
decisions or interpretations of the Committee or the Board, as appropriate, upon
any questions arising under the Plan or this Agreement.

 

29.Tax Requirements.  The Participant is hereby advised to consult immediately
with his own tax advisor regarding the tax consequences of this Agreement.  The
Company or, if applicable, any Subsidiary (for purposes of this Section 29, the
term “Company” shall be deemed to include any applicable Subsidiary), shall have
the right to deduct from all amounts paid in cash or other form in connection
with the Plan and this Agreement, any federal, state, local, or other taxes
required by law to be withheld in connection with this Award.  The Company may,
in its sole discretion, also require the Participant receiving shares of Common
Stock issued under the Plan to pay the Company the amount of any taxes that the
Company is required to withhold in connection with the Participant’s income
arising with respect to this Award.  Such payments shall be required to be made
when requested by the Company and may be required to be made prior to the
delivery of any certificate representing shares of Common Stock.  Such payment
may be made by (a) the delivery of cash to the Company in an amount that equals
or exceeds (to avoid the issuance of fractional shares under (c) below) the
required tax withholding obligations of the Company; (b) if the Company, in its
sole discretion, so consents in writing, the actual delivery by the exercising
Participant to the Company of shares of Common Stock that the Participant has
not acquired from the Company within six (6) months prior to the date of
exercise, which shares so delivered have an aggregate Fair Market Value that
equals or exceeds (to avoid the issuance of fractional shares under (c) below)
the required tax withholding payment; (c) if the Company, in its sole
discretion, so consents in writing, the Company’s withholding of a number of
shares to be delivered upon the exercise of the Stock Option, which shares so
withheld have an aggregate Fair Market Value that equals (but does not exceed)
the required tax withholding payment; or (d) any combination of (a), (b), or
(c).  The Company may, in its sole discretion, withhold any such taxes from any
other cash remuneration otherwise paid by the Company to the Participant.

 

[Remainder of Page Intentionally Left Blank;

Signature Page Follows.]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Participant, to evidence his consent and
approval of all the terms hereof, has duly executed this Agreement, as of the
date specified in Section 1 hereof.

COMPANY:

STAFFING 360 SOLUTIONS, INC.

By:

Name:

Title:

PARTICIPANT:

 

Signature

Name:

Address: