EXHIBIT 10.11

TALX CORPORATION

2005 OMNIBUS INCENTIVE PLAN

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TALX CORPORATION

2005 OMNIBUS INCENTIVE PLAN

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

 

 

 

1.

 

Purpose of the Plan

 

3

2.

 

Definitions

 

 

 

3

 

 

A.

 

“Act”

 

3

 

 

B.

 

“Award”

 

3

 

 

C.

 

“Award Agreement”

 

3

 

 

D.

 

“Beneficiary”

 

3

 

 

E.

 

“Board”

 

3

 

 

F.

 

“Cash-Based Award”

 

3

 

 

G.

 

“Cause”

 

3

 

 

H.

 

“Change in Control”

 

4

 

 

I.

 

“Code”

 

4

 

 

J.

 

“Committee”

 

4

 

 

K.

 

“Company”

 

4

 

 

L.

 

“Disability”

 

4

 

 

M.

 

“Employer”

 

5

 

 

N.

 

“Fair Market Value”

 

5

 

 

O.

 

“Incentive Stock Option”

 

5

 

 

P.

 

“Non-qualified Stock Option”

 

5

 

 

Q.

 

“Option”

 

5

 

 

R.

 

“Other Stock-Based Award”

 

5

 

 

S.

 

“Parent”

 

5

 

 

T.

 

“Participant”

 

5

 

 

U.

 

“Performance-Based Award”

 

5

 

 

V.

 

“Plan”

 

5

 

 

W.

 

“Restricted Stock”

 

5

 

 

X.

 

“Stock”

 

5

 

 

Y.

 

“Stock Appreciation Right”

 

6

 

 

Z.

 

“Subsidiary”

 

6

3.

 

Stock Subject to the Plan

 

6

4.

 

Administration

 

 

 

6

5.

 

Committee

 

 

 

6

6.

 

Options

 

 

 

7

 

 

A.

 

Type of Option

 

7

 

 

B.

 

Option Prices

 

7

 

 

C.

 

Vesting

 

7

 

 

D.

 

Exercise — Elections and Restrictions

 

7

 

 

E.

 

Option Terms

 

8

 

 

F.

 

Successive Option Grants

 

8

 

 

G.

 

Change in Control

 

8

 

 

H.

 

Other Terms

 

8

 

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Page

 

 

 

 

 

 

 

 

I.

 

Additional Incentive Stock Option Requirements

 

8

 

 

J.

 

Termination of Employment

 

9

 

 

K.

 

Death or Disability

 

9

 

 

L.

 

Deferral of Gain on a Non-qualified Stock Option

 

9

 

 

M.

 

No Repricing of Options Without Shareholder Approval

 

10

7.

 

Stock Appreciation Rights

 

10

 

 

A.

 

Grant Terms

 

10

 

 

B.

 

Exercise Terms

 

10

 

 

C.

 

Limitations

 

10

8.

 

Other Stock-Based Awards and Cash-Based Awards

 

10

 

 

A.

 

Terms of Restricted Stock Award

 

11

 

 

B.

 

Restricted Stock

 

11

9.

 

Performance-Based Awards

 

11

10.

 

Nontransferability of Awards

 

12

11.

 

Withholding

 

12

12.

 

Gross-Up for Excise Tax

 

13

13.

 

Adjustments Upon Changes in Capitalization or Corporation Acquisitions

 

13

14.

 

Beneficiaries/ Incapacity

 

13

15.

 

Amendment and Termination

 

14

16.

 

Effectiveness of the Plan

 

14

17.

 

Time of Granting of an Award

 

14

18.

 

Term of Plan

 

14

19.

 

Severability

 

14

20

 

Non-Waiver of Rights

 

14

21.

 

Assignment

 

14

22.

 

No Right To Continued Employment

 

15

23.

 

Awards to Consultants or Advisors

 

15

24.

 

Unfunded Plan

 

15

25.

 

Choice of Law

 

15

 

2

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TALX CORPORATION

2005 OMNIBUS INCENTIVE PLAN

1.  Purpose of the Plan. The purpose of the Plan is to provide the Company with
a means to assist in recruiting, retaining and rewarding certain employees,
directors and consultants and to motivate such individuals to exert their best
efforts on behalf of the Employer by providing incentives through the granting
of Awards. By granting Awards to such individuals, the Company expects that the
interests of the recipients will be better aligned with those of the Employer.

2.  Definitions. Unless the context clearly indicates otherwise, the following
capitalized terms shall have the meanings set forth below:

A. “Act” means the Securities Exchange Act of 1934, as amended, or any successor
thereto.

B. “Award” means any grant under the Plan of an Option, Stock Appreciation
Right, Cash-Based Award or Other Stock-Based Award.

C. “Award Agreement” means an agreement entered into between the Employer and a
Participant, or a certificate or other statement issued by the Employer as
determined by the Committee, as such agreement or certificate or other statement
may be amended from time to time, setting forth the terms and provisions
applicable to Awards granted under the Plan.

D. “Beneficiary” means any person or other entity, which has been designated by
a Participant in his or her most recent written beneficiary designation filed
with the Committee to receive the compensation specified under the Plan to the
extent permitted. If there is no beneficiary, then the term means the
Participant’s legal spouse or if there is no spouse, then the Participant’s
surviving children, or if none, then any person or other entity entitled by will
or the laws of descent and distribution to receive such compensation.

E. “Board” means the Board of Directors of the Company or any duly appointed
Committee thereof.

F. “Cash-Based Award” means an Award described in Section 8 as a Cash-Based
Award.

G. “Cause” means the occurrence of one of the following events:

(1) Participant commits a material breach of Participant’s terms of employment
or service which has not been cured within 10 days of written notice from the
Company that such material breach has occurred;

(2) Participant commits a crime against moral turpitude, including, without
limitation, committing an act of fraud, dishonesty, disclosure of confidential
information, or the commission of a felony, or direct and deliberate acts
constituting a breach of trust to the Company;

(3) Participant willfully violates Participant’s terms of employment or service,
including, without limitation, willfully or continuously refusing to perform the
duties reasonably assigned to Participant by the Company which are consistent
with the provisions of Participant’s terms of employment or service;

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(4) Participant willfully engages in conduct that damages the Company’s business
or reputation or materially injures the Company; or

(5) Participant regularly fails to perform his or her assigned duties and
responsibilities on a timely basis and/or regularly fails to perform his or her
assigned duties and responsibilities at a level of competence the Company has
the right to expect of an individual in the position held by the Participant.

H. “Change in Control” means (i) the purchase or other acquisition by any
person, entity or group of persons, within the meaning of Section 13(d) or 14(d)
of the Act (excluding, for this purpose, the Company or its subsidiaries or any
employee benefit plan (or related trust) of the Company or its subsidiaries), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Act) of 20% or more of the combined voting power of the Company’s
then-outstanding voting securities entitled to vote generally in the election of
directors in any transaction or series of transactions; or (ii) when individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board, provided that any
person who becomes a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was approved in advance
by a vote of at least a majority of the directors then comprising the Incumbent
Board excluding members of its Incumbent Board who are no longer serving as
directors, (other than an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Act, or an individual approved by the
Incumbent Board a result of an agreement intended to avoid or settle an actual
or threatened contest), shall be, for purposes of this section, considered as
though such person were a member of the Incumbent Board; or (iii) consummation
of a reorganization, merger or consolidation, in each case following such
reorganization, merger or consolidation: (a) persons who were the shareholders
of the Company immediately prior to such reorganization, merger or consolidation
immediately thereafter own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the reorganized, merged or
consolidated corporation’s then-outstanding voting securities, and (b) a
majority of members of the board or other governing body of such reorganized,
merged or consolidated corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or the approval of the
transaction by the Board; (iv) approval by shareholders of a liquidation or
dissolution of the Company (and the Company shall commence such liquidation or
dissolution), or consummation of the sale of all or substantially all of the
assets of the Company (in one transaction or a series of transactions); or
(v) any other event that a majority of the members of the Incumbent Board, in
their sole discretion, shall determine constitutes a Change in Control.

I. “Code” means the Internal Revenue Code of 1986, as amended, or any successor
thereto.

J. “Committee” means the committee described in Section 5.

K. “Company” means TALX Corporation, a Missouri corporation.

L. “Disability” means a mental or physical illness that entitles the Participant
to receive benefits under the long-term disability plan of the Company, or if
there is no such plan or the Participant is not covered by such a plan or the
Participant is not an employee of the Company, a mental or physical illness that
renders a Participant totally and permanently incapable of performing the
Participant’s duties for the Company. Notwithstanding the foregoing, a
Disability

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shall not qualify under this Plan if it is the result of (i) a willfully
self-inflicted injury or willfully self-induced sickness; or (ii) an injury or
disease contracted, suffered, or incurred while participating in a criminal
offense. The determination of a Disability for purposes of this Plan shall be
made by the Committee and shall not be construed to be an admission or
disability for any other purpose.

M. “Employer” means the Company and any other entity directly or indirectly
controlling, controlled by, or under common control with, the Company or any
other entity designated by the Board in which the Company has an interest.

N. “Fair Market Value” means the last price of such Stock as reported on such
date on the Composite Tape of the principal national securities exchange or, if
applicable, the Nasdaq National Market on which such Stock is listed or admitted
to trading, or, if such Stock is not listed or admitted on any national
securities exchange or the Nasdaq National Market, the last price on such date
as quoted on the National Association of Securities Dealers Automated Quotation
System (or such market in which such prices are regularly quoted) (“Nasdaq”), or
if no sale of such shares shall have been reported on the Composite Tape of any
national securities exchange or the Nasdaq National Market or quoted on the
Nasdaq on such date, then the immediately preceding date on which sales of such
shares have been so reported or quoted shall be used.

O. “Incentive Stock Option” means a stock option which is an incentive stock
option within the meaning of Code Section 422.

P. “Non-qualified Stock Option” means a stock option which is not an Incentive
Stock Option.

Q. “Option” means both an Incentive Stock Option and a Non-qualified Stock
Option.

R. “Other Stock-Based Award” means an Award granted pursuant to Section 8 and
described as an Other Stock-Based Award.

S. “Parent” means any corporation or other legal entity (other than the Company)
in an unbroken chain of corporations or other legal entities ending with the
Company if, at the time of the granting of the Option, each of the corporation
or other legal entity other than the Company owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other
corporations or other legal entity in such chain, or such other meaning as may
be hereafter ascribed to it in Code Section 424.

T. “Participant” means an employee, director or consultant of the Company who is
selected by the Committee to receive an Award.

U. “Performance-Based Award” means an Award issued pursuant to the terms of
Section 9.

V. “Plan” means the TALX Corporation 2005 Omnibus Incentive Plan.

W. “Restricted Stock” means Stock which is granted pursuant to the terms
specified in Section 8.

X. “Stock” means the common stock of the Company.

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Y. “Stock Appreciation Right” means a stock appreciation right described in
Section 7.

Z. “Subsidiary” means any corporation or other legal entity (other than the
Company) in an unbroken chain of corporations or other legal entities beginning
with the Company if, at the time of granting an Award, each of the corporations
or other legal entities other than the last corporation or other legal entity in
the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock or other equity in one of the other
corporations or other legal entities in such chain, or such other meaning as may
be hereafter ascribed to it in Code Section 424.

3.  Stock Subject to the Plan. Three million (3,000,000) shares of Stock have
been allocated to the Plan and will be reserved to satisfy Awards under the
Plan. The maximum number of shares of Stock subject to Awards which may be
granted during a calendar year to a Participant shall be one-hundred thousand
(100,000). The Company may, in its discretion, use shares held in the treasury
or shares acquired on the public market in lieu of authorized but unissued
shares. If any Award shall expire or terminate for any reason, the shares
subject to the Award shall again be available for the purposes of the Plan. No
fractional shares of Stock may be issued under the Plan; fractional shares of
Stock will be rounded down to the nearest whole share of Stock.

4.  Administration. The Plan shall be administered by the Committee, or in its
absence, the Board of Directors. Subject to the express provisions of the Plan,
the Committee shall have plenary authority, in its discretion, to determine the
individuals to whom, and the time or times at which, Awards shall be granted and
the number of shares, if applicable, to be subject to each Award. In making such
determinations, the Committee may take into account the nature of services
rendered by the respective individuals, their present and potential
contributions to the Employer’s success and such other factors as the Committee,
in its discretion, shall deem relevant. Subject to the express provisions of the
Plan, the Committee shall also have plenary discretionary authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to it,
to determine the terms and provisions of the respective Award Agreements (which
need not be identical) and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee may delegate to an
appropriate officer of the Company authority to perform any of its tasks under
the Plan, including without limitation the authority to grant Awards. The
Committee’s determinations on the matters referred to in this Section 4 shall be
conclusive.

5.  Committee. The Committee shall be comprised of directors on the compensation
committee of the Board of Directors of the Company (“Board of Directors”) or,
with respect to awards to directors of the Company, shall be comprised of the
Board of Directors or one of its committees, and shall, to the extent required
by law, be constituted to comply with Rule 16b-3 under the Act, or any successor
to such Rule.

The Committee shall be appointed by the Board, which may from time to time
appoint members of the Committee in substitution for members previously
appointed and may fill vacancies, however caused, in the Committee. The Board
shall select one of the Committee members as its Chairman, and shall hold its
meetings at such times and places as it may determine. A majority of its members
shall constitute a quorum. All determinations of the Committee shall be made by
a majority of its members present at any meeting at which there is a quorum. Any
decision or determination reduced to writing and signed by all of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a secretary, shall keep
minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable. The Committee

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may, to the extent permitted by law, delegate its responsibilities and authority
hereunder to an officer of the Company.

6.  Options. The Committee, in its discretion, may grant Options which are
Incentive Stock Options or Non-qualified Stock Options, as evidenced by the
Award Agreement, and shall be subject to the foregoing and the following terms
and conditions and to such other terms and conditions, not inconsistent
therewith, as the Committee shall determine:

A.  Type of Option. Incentive Stock Options may be granted to any individual
classified by the Committee as an employee of the Company, a Parent or a
Subsidiary. A Non-qualified Stock Option may be granted to any individual
selected by the Committee. To the extent that any Option is not designated as an
Incentive Stock Option or even if so designated does not qualify as an Incentive
Stock Option, it shall constitute a Non-qualified Stock Option.

B.  Option Prices. The purchase price of the Stock under each Incentive Stock
Option shall not be less than 100% of the Fair Market Value of the Stock at the
time of the granting of the Option; provided that, in the case of a Participant
who owns more than 10% of the total combined voting power of all classes of
stock of the Company, a Parent or a Subsidiary, the purchase price of the Stock
under each Incentive Stock Option shall not be less than 110% of the Fair Market
Value of the Stock on the date such Option is granted. The purchase price of the
Stock under each Non-qualified Stock Option shall be determined from time to
time by the Committee, which need not be uniform for all Participants, but in no
event shall be less than the Fair Market Value at the time of the granting of
the Option.

C.  Vesting. Options shall be exercisable at the rate established by the
Committee in the Award Agreement. In addition, the Committee may at any time
accelerate the exercisability of all or part of any Option. Except as provided
in Sections 6.J. and 6.K. hereof, no option may be exercised at any time unless
the optionee is then an employee or an officer or director of the Company or a
subsidiary and has been so continuously since the granting of the option. The
holder of an option shall have none of the rights of a shareholder with respect
to the share subject to option until such shares shall be issued to such holder
upon the exercise of the option.

D.  Exercise — Elections and Restrictions. The purchase price for an Option is
to be paid in full upon the exercise of the Option, either (i) in cash, (ii) in
the discretion of the Committee, by the tender to the Company (either actual or
by attestation) of shares of Stock already owned by the Participant for a period
of at least six months as of the date of tender and registered in his or her
name, having a Fair Market Value equal to the cash exercise price of the Option
being exercised, (iii) in the discretion of the Committee, by the delivery of
cash by a broker-dealer as a “cashless” exercise, provided such method of
payment may not be used by a director or executive officer of the Company to the
extent it would violate the Sarbanes-Oxley Act of 2002 or (iv) in the discretion
of the Committee, by any combination of the payment methods specified in
clauses (i), (ii) and (iii) hereof; provided that, no shares of Stock may be
tendered in exercise of an Incentive Stock Option if such shares were acquired
by the Participant through the exercise of an Incentive Stock Option unless
(a) such shares have been held by the Participant for at least one year and
(b) at least two years have elapsed since such prior Incentive Stock Option was
granted. The Committee may provide in an Award Agreement that payment in full of
the option price need not accompany the written notice of exercise provided that
the notice of exercise directs that the certificate or certificates for the
shares of Stock for which the Option is exercised be delivered to a licensed
broker acceptable to the Company as the agent for the individual exercising the
Option and, at the time such certificate or certificates are delivered, the
broker tenders to the Company cash (or cash equivalents acceptable to the
Company) equal to the option price for the

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shares of Stock purchased pursuant to the exercise of the Option plus the amount
(if any) of any withholding obligations on the part of the Company. The proceeds
of sale of Stock subject to the Option are to be added to the general funds of
the Company or to the shares of the Stock held in its Treasury, and used for its
corporate purposes as the Board shall determine.

E.  Option Terms. The term of each Option shall not be more than ten (10) years
from the date of granting thereof or such shorter period as is prescribed in the
Award Agreement; provided that, in the case of a Participant who owns more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, a Parent or a Subsidiary, the term of any Incentive Stock Option
shall not be more than five (5) years from the date of granting thereof or such
shorter period as prescribed in the Award Agreement. Within such limit, Options
will be exercisable at such time or times, and subject to such terms,
restrictions and conditions, as the Committee shall, in each instance, approve,
which need not be uniform for all Participants. To the extent Options are
subject to restrictions, Options shall vest in whole shares only, and the holder
of an Option shall not be deemed vested in any fractional share regardless of
anything to the contrary in any Award Agreement. The holder of an Option shall
have none of the rights of a shareholder with respect to the shares subject to
Option until such shares shall be issued to him or her upon the exercise of his
or her Option. Upon exercise of an Option, the Committee shall withhold a
sufficient number of shares to satisfy the Company’s minimum required statutory
withholding obligations for any taxes incurred as a result of such exercise
(based on the minimum statutory withholding rates for federal, state and local
tax purposes, including payroll taxes); provided that, in lieu of all or part of
such withholding, the Participant may pay an equivalent amount of cash to the
Company.

F.  Successive Option Grants. As determined by the Committee, successive option
grants may be made to any Participant under the Plan.

G.  Change in Control. Except as otherwise provided in a Participant’s Award
Agreement, and subject to Section 13, in the event of a Change in Control, a
Participant granted an Option hereunder will be entitled to purchase, at any
time thereafter and during the term thereof (subject, however, to the provisions
on termination of employment described in this subsection), the entire number of
shares to which the Option relates. If the holder of an Option terminates
employment following a Change in Control, the holder of the Option may exercise
any or all of the holder’s unexercised unexpired portion of any Option, at any
time within three (3) months or, with respect to a Non-qualified Stock Option,
such longer period as approved by the Committee after such termination, but not
beyond the term of the Option, provided such termination is within twelve months
after the date of the Change in Control. The Committee may provide such other
terms as it determines in its sole discretion in an Award Agreement with respect
to a Change in Control.

H.  Other Terms. The Committee may provide that the right to exercise an Option
will be restricted as to time of exercise and subject to such other terms and
conditions as the Committee determines in its discretion.

I.  Additional Incentive Stock Option Requirements.

(1)  Grant Limits. The maximum aggregate Fair Market Value (determined at the
time an Option is granted) of the Stock with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year (under all plans of the Company, a Parent and a Subsidiary) shall not
exceed $100,000. To the extent that any Option is

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not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-qualified Stock
Option.

(2)  Notice of Disposal. A Participant who disposes of Stock acquired upon the
exercise of an Incentive Stock Option either (i) within two years after the date
of grant of such Incentive Stock Option or (ii) within one year after the
transfer of such shares to the Participant, shall notify the Company of such
disposition and of the amount realized upon such disposition.

J.  Termination of Employment. Except to the extent provided hereunder with
respect to the death or Disability of a Participant or a Change in Control, a
Participant granted an Option hereunder must exercise the Option prior to his or
her termination of employment, except that if the employment of a Participant
terminates with the consent and approval of his or her Employer, the Committee
may, in its absolute discretion, permit the Participant to exercise his or her
Option, to the extent that he or she was entitled to exercise it at the date of
such termination of employment, at any time within three (3) months or, with
respect to a Non-qualified Stock Option, such longer period as approved by the
Committee after such termination, but not beyond the term of the Option.
Notwithstanding the preceding, the Committee may, in a Participant’s Award
Agreement, afford a Participant who terminates employment other than for Cause,
the right to exercise his or her Option, to the extent that he or she was
entitled to exercise it at such date of termination of employment, at any time
within three (3) months or, with respect to a Non-qualified Stock Option, such
longer period as approved by the Committee after such termination, but not after
ten (10) years (or five (5) years, if applicable) from the date of granting
thereof.

K.  Death or Disability. Except as may otherwise be provided by the Committee in
any Award Agreement, this paragraph shall apply in the case of death or
Disability of a Participant granted an Option hereunder. Unless otherwise
specifically provided in an Award Agreement or determined by the Committee, any
unexpired and unexercised Options, other than Incentive Stock Options, held by a
Participant who incurs a termination of employment due to death shall thereafter
be fully exercisable for a period of one (1) year immediately following the date
of such death or until the expiration of the term of the Option, whichever
period is shorter. Unless otherwise specifically provided in an Award Agreement
or determined by the Committee, any unexpired or unexercised Incentive Stock
Options held by a Participant who incurs a termination of employment due to
death shall be fully exercisable for a period of ninety consecutive days
immediately following such death or until the expiration of the term of the
Option, whichever is shorter. Unless otherwise specifically provided in an Award
Agreement or determined by the Committee, any unexpired and unexercised Option
held by a Participant who incurs a termination of employment due to Disability
shall thereafter be fully exercisable by the Participant for a period of one
(1) year immediately following the date of such termination of employment or
until the expiration of the term of the Option, whichever period is shorter, and
the Participant’s death at any time following such termination of employment due
to Disability shall not affect the foregoing. For this purpose, a person will be
deemed to be disabled if he or she is permanently and totally disabled within
the meaning of Section 422(c)(6) of the Code and furnishes such proof of
Disability as the Committee may require in its discretion. The Committee may, in
any Award Agreement, provide additional provisions for the exercise of an Option
after the death or Disability of a Participant.

L.  Deferral of Gain on a Non-qualified Stock Option. In accordance with the
terms of the applicable non-qualified deferred compensation plan, if any, in
which a Participant is eligible to participate, a Participant may elect to defer
any gain realized upon the exercise of a Non-qualified Stock Option. The
election to defer the gain must be made in accordance with the applicable
non-qualified deferred compensation plan.

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M.  No Repricing of Options Without Shareholder Approval. Options, once issued,
may not be repriced, either directly (lowering the exercise price of a stock
option) or individually (canceling an outstanding stock option and granting a
replacement stock option with a lower exercise price), without first obtaining
the approval of the shareholders of the Company.

7.  Stock Appreciation Rights.

A.  Grant Terms. The Committee may grant a Stock Appreciation Right independent
of an Option or in connection with an Option or a portion thereof. A Stock
Appreciation Right granted in connection with an Option or a portion thereof
shall cover the same shares of Stock covered by the Option, or a lesser number
as the Committee may determine. A Stock Appreciation Right shall be subject to
the same terms and conditions as an Option, and any additional limitations,
terms or conditions set forth in this Section 7 or the Award Agreement.

B.  Exercise Terms. The exercise price per share of Stock of a Stock
Appreciation Right shall be an amount determined by the Committee, but in no
event shall such exercise price be less than the Fair Market Value on the date
of grant. A Stock Appreciation Right granted independent of an Option shall
entitle the Participant upon exercise to a payment from the Company in an amount
equal to the excess of the Fair Market Value on the exercise date of a share of
Stock over the exercise price per share, times the number of Stock Appreciation
Rights exercised. A Stock Appreciation Right granted in connection with an
Option shall entitle the Participant to surrender an unexercised Option (or
portion thereof) and to receive in exchange an amount equal to the excess of the
Fair Market Value on the exercise date of a share of Stock over the exercise
price per share for the Option, times the number of shares covered by the Option
(or portion thereof) which is surrendered. Payment shall be made in Stock.
Fractional shares of Stock shall be rounded up or down to the nearest whole
share upon the exercise of a Stock Appreciation Right.

C.  Limitations. The Committee may impose such conditions upon the
exercisability or transferability of Stock Appreciation Rights as it determines
in its sole discretion. To the extent Stock Appreciation Rights are subject to
restrictions, Stock Appreciation Rights shall vest in whole shares only, and the
holder of a Stock Appreciation Right shall not be deemed vested in any
fractional share regardless of anything to the contrary in any Award Agreement.

8.  Other Stock-Based Awards and Cash-Based Awards. The Committee may, in its
sole discretion, grant Awards of Stock, Restricted Stock, performance units and
other Awards that are valued in whole or in part by reference to the Fair Market
Value of Stock. These Awards shall collectively be referred to herein as Other
Stock-Based Awards. The Committee may also, in its sole discretion, grant
Cash-Based Awards, which shall have a value as may be determined by the
Committee. Other Stock-Based Awards shall be in such form, and dependent on such
conditions, as the Committee shall determine, including, but not limited to, the
right to receive one or more shares of Stock (or the cash-equivalent thereof)
upon the completion of a specified period of service, the occurrence of an event
or the attainment of performance objectives. To the extent required to avoid the
acceleration of taxes or increased taxes or penalties under Section 409A of the
Code and the regulations and other guidance issued thereunder, the exercise
price per share of Stock of an Other Stock-Based Award shall be an amount
determined by the Committee, but in no event shall such exercise price be less
than the Fair Market Value on the date of grant. Other Stock-Based Awards and
Cash-Based Awards may be granted with or in addition to other Awards. Subject to
the other terms of the Plan, Other Stock-Based Awards and Cash-Based Awards may
be granted to such Participants in such amounts and upon such terms, and at any
time and from time to time, as shall be determined by the Committee and set
forth in an Award Agreement. To the extent Other Stock-Based Awards are subject
to restrictions, Other

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Stock-Based Awards shall vest in whole shares only, and the holder of an Other
Stock-Based Award shall not be deemed vested in any fractional share regardless
of anything to the contrary in any Award Agreement.

Without limiting the foregoing, Cash-Based Awards may include incentive bonuses
and long-term incentive awards based on a percentage of a Participant’s base
salary and the accomplishment of specific financial objectives and departmental
performance goals. Any such percentage of base salary may vary between
Participants, in the Committee’s sole discretion. An Award Agreement issued in
connection with a Cash-Based Award that is an incentive bonus may specify
certain measures, including how quota, commissions and bonuses are earned, and
may have an earnings per share goal and departmental performance goal component,
as applicable. The Award Agreement shall set forth such other terms and criteria
as the Committee determines in its sole discretion.

A.  Terms of Restricted Stock Award. The Committee, in its discretion, may grant
shares of Restricted Stock; provided however, that the shares thereby awarded
shall be nontransferable by the Participant during the period described in the
Award Agreement and shall be subject to the risk of forfeiture described in the
Award Agreement. The Committee may require the payment and/or reimbursement upon
forfeiture of consideration to the extent required by law or otherwise deemed
advisable by the Committee in its discretion. Prior to the time shares become
transferable, the shares of Restricted Stock shall bear a legend indicating
their nontransferability, and, unless otherwise provided in the Award Agreement,
if the Participant terminates employment, if applicable, with the Company prior
to the time a restriction lapses, and/or if the performance criteria specified
in the Award Agreement are not achieved, the Participant shall forfeit any
shares of Restricted Stock which are still subject to the restrictions at the
time of termination of such employment, or expiration of the performance period.
Restricted Stock awards will be subject to graded vesting with a minimum vesting
period of three years, unless otherwise determined by the Committee.
Notwithstanding the foregoing, in the event of a Change of Control, all
previously granted shares of Restricted Stock not yet free of the restrictions
of this Section 8 shall become immediately free of such restrictions. In the
event of the death or Disability of the Participant, unless otherwise provided
in the Award Agreement, all previously granted shares of Restricted Stock not
yet free of the restrictions described above shall become immediately free of
such restrictions.

B.  Restricted Stock. Restricted Stock may be granted in the form of shares
registered in the name of the Participant but held by the Company until the
restrictions on the Restricted Stock Award lapse, subject to forfeiture, as
provided in the applicable Award Agreement. The Committee, in the applicable
Award Agreement, may, in its sole discretion, award all or any rights of a
shareholder with respect to the shares of Restricted Stock during the period
that they remain subject to restrictions, including without limitation, the
right to vote the shares and receive dividends.

9.  Performance-Based Awards. The Committee may, in its sole and absolute
discretion, determine that certain Other Stock-Based Awards and/or Cash-Based
Awards should be subject to such requirements so that they are deductible by the
Employer under Code Section 162(m). If the Committee so determines, such Awards
shall be considered Performance-Based Awards subject to the terms of this
Section 9, as provided in the Award Agreement. A Performance-Based Award shall
be granted by the Committee in a manner to satisfy the requirements of Code
Section 162(m) and the regulations thereunder. The performance measures to be
used for purposes of a Performance-Based Award shall be chosen by the Committee,
in its sole and absolute discretion, from among the following: earnings per
share of Stock; book value per share of Stock; net income (before or after
taxes); operating income; return on invested capital, assets

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or equity; cash flow return on investments which equals net cash flows divided
by owners’ equity; earnings before interest or taxes; earnings before interest,
taxes, depreciation and amortization; gross revenues or revenue growth; market
share; expense management; improvements in capital structure; profit margins;
Stock price; total shareholder return; free cash flow; or working capital.
Performance objectives need not be the same with respect to all
Performance-Based Awards granted under the Plan. The performance measures may
relate to the Company, a Parent, a Subsidiary, an Employer or one or more units
of such an entity. Each of the performance criteria is to be specifically
defined in advance by the Committee and may include or exclude specified items
of an unusual or non-recurring nature. No Performance-Based Award shall be paid
if the applicable performance objective(s) are not achieved or if the Plan is
not approved by the shareholders of the Company. Notwithstanding anything in the
Plan to the contrary, in no event shall the total amount of a Performance-Based
Award paid to any Participant in any fiscal year of the Company exceed two
million dollars.

The Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to an Award and, if they
have, to so certify in writing and ascertain the amount of the applicable
Performance-Based Award. The Committee shall have the discretion to adjust
Performance-Based Awards downward. Unless the shareholders of the Company shall
have first approved thereof, no amendment of the Plan shall be effective which
would increase the maximum amount which can be paid under a Performance-Based
Award, which would change the specified performance objectives for payment of
Performance-Based Awards, or which would modify the requirements as to
eligibility for participation in Performance-Based Awards under the Plan.

10.  Nontransferability of Awards. An Award granted under the Plan and all
rights thereunder shall, by its terms, be non-transferable, nonassignable and
not subject to encumbrance in any manner other than by will or the laws of
descent and distribution, and an Award may be exercised, if applicable, during
the lifetime of the Participant thereof, only by the Participant or his or her
guardian or legal representative. In such appropriate circumstances as
determined by the Committee, the Committee may provide for limited
transferability of awards provided such transferability is expressly set forth
in an Award Agreement. In no event, however, may the Committee provide in an
Award Agreement that an Incentive Stock Option is transferable except as
permitted by law. Any attempted assignment, transfer, mortgage, pledge or
encumbrance except as herein authorized, shall be void and of no effect.

11.  Withholding. No later than the date as of which an amount first becomes
includible in the gross income of the Participant for federal tax purposes with
respect to any Award, the Participant shall pay to the Company (or other entity
identified by the Committee), or make arrangements satisfactory to the Company
or other entity identified by the Committee regarding the payment of, any
federal, state, or local taxes of any kind (including employment taxes) required
by law to be withheld with respect to such income. Unless otherwise determined
by the Committee, withholding obligations may be settled with Stock, including
shares of Stock that are part of the Award that give rise to the withholding
requirement. The obligations of the Company under the Plan shall be conditional
on such payment or arrangements, and the Company shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment otherwise due
to the Participant. Subject to approval by the Committee, a Participant may
elect to have such tax withholding obligation satisfied, in whole or in part, by
(i) authorizing the Company to withhold from shares of Stock to be issued
pursuant to any Award a number of shares with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the required
statutory minimum (but no more than such required minimum) with respect to the
Company’s withholding obligation, or (ii) transferring to the Company shares of
Stock owned by the Participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that

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would satisfy the required statutory minimum (but no more than such required
minimum) with respect to the Company’s withholding obligation.

12.  Gross-Up for Excise Tax. If all or any portion of the payments and benefits
(including any acceleration of vesting) provided under this Plan, either alone
or together with other payments and benefits which a Participant receives or is
then entitled to receive from the Company or an affiliate of the Company, would
constitute a “parachute payment” within the meaning of Section 280G of the Code,
the Company shall not, unless otherwise provided in the Award Agreement or
otherwise approved by the Committee, provide a tax “gross-up” payment.

13.  Adjustments Upon Changes in Capitalization or Corporation Acquisitions.
Notwithstanding any other provisions of the Plan, unless otherwise provided in
the Award Agreement, the number and class of shares subject to each outstanding
Award and the exercise prices, if applicable, shall be adjusted, to the same pro
rata number of shares and price as in the original Award Agreement, in the event
of changes in the outstanding Stock by reason of stock dividends, stock splits,
reverse stock splits, recapitalization, mergers, consolidations, statutory share
exchange, sale of all or substantially all assets, split-ups, combinations or
exchanges of shares and the like, and, in the event of any such change in the
outstanding Stock, the aggregate number and class of shares available under the
Plan and the maximum number of shares as to which Awards may be granted to an
individual shall be appropriately adjusted by the Committee, whose determination
shall be conclusive. In the event the Company, a Parent or a Subsidiary enters
into a transaction described in Section 424(a) of the Code with any other
corporation, the Committee shall, unless otherwise provided in the Award
Agreement, grant options to employees or former employees of such corporation in
substitution of options previously granted to them upon such terms and
conditions as shall be necessary to qualify such grant as a substitution
described in Section 424(a) of the Code.

In the event of a Change in Control, notwithstanding any other provisions of the
Plan or an Award Agreement to the contrary, the Committee may, in its sole
discretion, provide for:

(1) Accelerated vesting of any outstanding Awards that are otherwise
unexercisable or unvested as of a date selected by the Committee;

(2) Termination of an Award upon the consummation of the Change in Control in
exchange for the payment of a cash amount determined at the discretion of the
Committee but intended to provide the Participant with the difference between
the Stock subject to the vested portion of the Award and the exercise price,
provided, however, that in the event the payment would be subject to
Section 409A of the Code, the Committee may, in its discretion, specify in the
Award Agreement that the definition of change in control as set forth in such
Code Section 409A and the guidance issued with respect thereto, shall control
rather than the definition set forth in Section 2.H. of the Plan; and/or

(3) Issuance of substitute Awards to substantially preserve the terms of any
Awards previously granted under the Plan.

14.  Beneficiaries/ Incapacity. Each Participant may designate a Beneficiary to
exercise any Option or Stock Appreciation Right or receive any Award held by the
Participant at the time of the Participant’s death or to be assigned any other
Award outstanding at the time of the Participant’s death. Except in the case of
the holder’s incapacity, only the holder may exercise an Option or Stock
Appreciation Right. In the event of the holder’s incapacity, the holder’s legal
representative or such other person determined by the Committee to be acting on
behalf of the holder, may exercise an Option or Stock Appreciation Right.

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15.  Amendment and Termination. The Board may at any time terminate the Plan, or
make such amendments or modifications to the Plan as it shall deem advisable;
provided, however, that the Board may not, without further approval by the
holders of Stock, increase the maximum number of shares as to which Awards may
be granted under the Plan (except under the anti-dilution provisions of
Section 13), change the class of employees to whom Incentive Stock Options may
be granted, withdraw the authority to administer the Plan from a committee whose
members satisfy the requirements of Section 5, increase the maximum amount which
can be paid under a Performance-Based Award, change the specified performance
objectives for payment of Performance-Based Awards, modify the requirements as
to eligibility for participation in Performance-Based Awards under the Plan, or
make any other amendments or modifications which require shareholder approval
under applicable law. No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have been
granted, have a material adverse effect on the rights of such Participant under
such Award.

16.  Effectiveness of the Plan. The Plan shall become effective May 10, 2005
upon adoption by the Board subject, however, to its further approval by the
shareholders of the Company given within twelve (12) months of the date the Plan
is adopted by the Board at a regular meeting of the shareholders or at a special
meeting duly called and held for such purpose. Grants of Awards may be made
prior to such shareholder approval but all Award grants made prior to
shareholder approval shall be subject to the obtaining of such approval and if
such approval is not obtained, such Awards shall not be effective for any
purpose.

17.  Time of Granting of an Award. An Award grant under the Plan shall be deemed
to be made on the date on which the Committee, by formal action of its members
duly recorded in the records thereof, makes an Award to a Participant (but in no
event prior to the adoption of the Plan by the Board); provided that, such Award
is evidenced by a written Award Agreement duly executed on behalf of the Company
and on behalf of the Participant, if applicable, within a reasonable time after
the date of the Committee action. If an Award is granted to a person who is
about to become an employee of the Company, then the Award shall not be
effective until the person becomes an employee and any other specified
contingencies are satisfied.

18.  Term of Plan. This Plan shall terminate ten (10) years after the date on
which it is approved and adopted by the Board and no Award shall be granted
hereunder after the expiration of such ten-year period. Awards outstanding at
the termination of the Plan shall continue in accordance with their terms and
shall not be affected by such termination.

19.  Severability. Any word, phrase, clause, sentence or other provision herein
which violates or is prohibited by any applicable law, court decree or public
policy shall be modified as necessary to avoid the violation or prohibition and
so as to make this Plan and any Award Agreement enforceable as fully as possible
under applicable law, and if such cannot be so modified, the same shall be
ineffective to the extent of such violation or prohibition without invalidating
or affecting the remaining provisions herein.

20.  Non-Waiver of Rights. The Company’s failure to enforce at any time any of
the provisions of this Plan or any Award Agreement or to require at any time
performance by the Participant of any of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect either the validity
of this Plan, any Award Agreement, or any part hereof, or the right of the
Company thereafter to enforce each and every provision in accordance with the
terms of this Plan and any Award Agreement.

21.  Assignment. Any Award Agreement shall be freely assignable by the Company
and shall inure to the benefit of, and be binding upon, the Company, its
successors and assigns and/or any other entity which shall succeed to the
business presently being conducted by the Company.

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22.  No Right To Continued Employment. Nothing in the Plan or in any Award
granted pursuant to the Plan shall be considered or construed as creating a
contract of employment for any specified period of time or shall confer on any
individual any right to continue in the employ of the Employer or interfere in
any way with the right of the Employer to terminate his or her employment at any
time.

23.  Awards to Consultants or Advisors. Unless otherwise provided in the
applicable Award Agreement, the provisions of this Plan shall apply with equal
force to Awards granted to Participants who are consultants and advisors or
directors of the Company or any of its Subsidiaries or Parent, provided, that
references to “employment” and the termination thereof (similar concepts or
terms) shall be interpreted as “service” and the termination thereof (similar
concepts or terms) as determined in the Committee’s discretion.

24.  Unfunded Plan. This Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be represented by Awards
under this Plan. Neither the Company, its Parent or Subsidiaries, the Committee,
nor the Board shall be deemed to be a trustee of any amounts to be paid under
this Plan nor shall anything contained in this Plan or any action taken pursuant
to its provisions create or be construed to create a fiduciary relationship
between the Company and/or its Parent or Subsidiaries, and a Participant or
successor. To the extent any person acquires a right to receive an Award under
this Plan, such right shall be no greater than the right of an unsecured
creditor of the Company.

25.  Choice of Law. The Plan shall be governed by and construed in accordance
with the laws of the State of Missouri without regard to conflicts of law.

* * *

The foregoing Plan was approved and adopted by the Board on May 10, 2005.

 

 

 

 

TALX CORPORATION

 

 

 

By: /s/ William W. Canfield

 

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