EXHIBIT 10.2

 

WESTAFF, INC.

 

2006 NON-EMPLOYEE DIRECTOR OPTION PROGRAM

 

ARTICLE I
ESTABLISHMENT AND PURPOSE OF THE PROGRAM

 

1.01        Establishment of Program

 

The Westaff, Inc. 2006 Non-Employee Director Option Program (the “Program”) is
adopted pursuant to the Westaff, Inc. 2006 Stock Incentive Plan (the “Plan”)
and, in addition to the terms and conditions set forth below, is subject to the
provisions of the Plan.

 

1.02        Purpose of Program

 

The purpose of the Program is to enhance the ability of the Company to attract
and retain directors who are not Employees (“Non-Employee Directors”) through a
program of automatic Option grants.

 

1.03        Effective Date of the Program

 

The Program is effective as of the date the Plan is approved by the stockholders
of the Company.

 

ARTICLE II
DEFINITIONS

 

Capitalized terms in this Program, unless otherwise defined herein, have the
meaning given to them in the Plan.

 

ARTICLE III
OPTION TERMS

 

3.01        Date of Grant and Number of Shares

 

A Non-Qualified Stock Option to purchase 3,000 shares of Common Stock shall be
granted (the “Initial Grant”) to each Non-Employee Director, such Initial Grant
to be made to Non-Employee Directors (elected or appointed to the Board after
the effective date of this Program) on the first business day after each such
Non-Employee Director first becomes a Non-Employee Director; provided that no
Initial Grant shall be made to any Non-Employee Director who has at any time
been in the prior employ of the Company or any Related Entity. In addition, on
the first business day after each annual meeting of the Company’s stockholders
commencing with the annual meeting of the Company’s stockholders in 2006, each
Non-Employee Director who continues as a Non-Employee Director following such
annual meeting shall be granted a Non-Qualified Stock Option to purchase 3,000
shares of Common Stock (a “Subsequent Grant”); provided that no Subsequent Grant
shall be made to any Non-Employee Director who has not served as a director of
the Company, as of the time of such annual meeting, for at least six (6) months.

 

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3.02        Vesting

 

Each Initial Grant and Subsequent Grant under the Program shall vest and become
fully exercisable on the first anniversary of the grant date.

 

In the event the Non-Employee Director’s Continuous Service is terminated as the
result of the Non-Employee Director’s death of Disability, 100% of the Shares
subject to the Option shall vest immediately prior to the termination of the
Non-Employee Director’s Continuous Service.

 

3.03        Exercise Price

 

The exercise price per share of Common Stock of each Initial Grant and
Subsequent Grant shall be one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.

 

3.04        Corporate Transaction/Change in Control

 

(a)           In the event of a Corporate Transaction, each Option which is at
the time outstanding under the Program automatically shall become fully vested
and exercisable immediately prior to the effective date of such Corporate
Transaction. Effective upon the consummation of the Corporate Transaction, all
outstanding Options under the Program shall terminate. However, all such Options
shall not terminate to the extent they are Assumed in connection with the
Corporate Transaction.

 

(b)           In the event of a Change in Control (other than a Change in
Control which also is a Corporate Transaction), each Option which is at the time
outstanding under the Program automatically shall become fully vested and
exercisable, immediately prior to the specified effective date of such Change in
Control.

 

3.05        Other Terms

 

The Administrator shall determine the remaining terms and conditions of the
Options awarded under the Program.

 

3.06        Amendment, Suspension or Termination of the Program

 

The Board may at any time amend, suspend or terminate the Program without the
approval of the Company’s stockholders.

 

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