Exhibit
10.3.8.1


 


WESTAFF,
INC.

NOTICE OF GRANT OF STOCK OPTION


 


Notice is hereby given of the following option grant
(the “Option”) to purchase shares of the Common Stock of Westaff, Inc. (the
“Corporation”):


 


	
  Optionee:

  	
   

  	
  Dwight S. Pedersen

  
	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
  March 1, 2002

  
	
   

  	
   

  	
   

  
	
  Vesting Commencement Date:

  	
   

  	
  January 14, 2002

  
	
   

  	
   

  	
   

  
	
  Exercise Price:

  	
   

  	
  $2.35 per share

  
	
   

  	
   

  	
   

  
	
  Number of Option Shares:

  	
   

  	
  127,659 shares

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  January 13, 2012

  
	
   

  	
   

  	
   

  
	
  Type of Options:

  	
   

  	
  Incentive Stock Option

  
	
   

  	
   

  	
   

  
	
  Exercise Schedule:

  	
   

  	
  The Option shall vest in accordance with the
  following schedule.  In no event shall
  the 

  
	
  Option become exercisable for any additional Option
  Shares after Optionee’s cessation of Service.

  



 


	
  DATE

  	
   

  	
  VESTED
  OPTION SHARES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting Commencement Date

  	
   

  	
  42,553

  	
   

  
	
  The earlier to occur of (i) October 31, 2003,
  provided that the Corporation’s Fair Market Value per share of Common Stock
  equals at least $5.00 or more, (ii) the moment immediately prior to the
  effective date of a Corporate Transaction or (iii) a Change in Control.

  	
   

  	
  42,553

  	
   

  
	
  The earlier to occur of (i) October 29, 2004,
  provided that the Corporation’s Fair Market Value per share of Common Stock
  equals at least $6.00 or more, (ii) the moment immediately prior to the
  effective date of a Corporate Transaction or (iii) a Change in Control.

  	
   

  	
  42,553

  	
   

  
	
  January 13, 2007

  	
   

  	
  Any remaining shares
  that have not yet vested

  	
   

  



 


Optionee understands and agrees that the Option is
granted subject to and in accordance with the terms of the Westaff, Inc. 1996
Stock Option/Stock Issuance Plan (the “Plan”). 
Optionee further agrees to be bound by the terms of the Plan and the
terms of the Option as set forth in the Stock Option Agreement attached hereto
as Exhibit A.


 


Optionee hereby acknowledges receipt of a copy of the
official prospectus for the Plan and a copy of the Plan in the forms attached
hereto as Exhibit B.


 

















 


No Employment or Service Contract.  Nothing in this Notice or in the attached
Stock Option Agreement or in the Plan shall confer upon Optionee any right to
continue in Service for any period of specific duration of interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee’s Service at any time
for any reason, with or without cause.


 


Definitions. All capitalized terms
in this Notice shall have the meaning assigned to them in this Notice, the Plan
or in the attached Stock Option Agreement.


 


 


 


	
  October 4, 2004

  	
   

  
	
   

  	
  WESTAFF, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Robert
  Stover

  	
   

  
	
   

  	
   

  	
  Name:  

  	
  W. Robert Stover

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Dwight S.
  Pedersen

  	
   

  
	
   

  	
   

  	
  Dwight S. Pedersen

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  1800 Alma Avenue., #406

  
	
   

  	
   

  	
  Walnut Creek, CA 94596

  
						



 

















 


Exhibit
A


 


WESTAFF, INC.


STOCK OPTION AGREEMENT


 


RECITALS


 


A.                                   The
Corporation has adopted the Plan for the purpose of retaining the services of
selected Employees, non-employee members of the Board or the board of directors
of any Parent or Subsidiary and consultants and other independent advisors who
provide services to the Corporation (or any Parent or Subsidiary).


 


B.                                     Optionee
is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation’s grant of an option
to Optionee.


 


C.                                     All
capitalized terms in this Agreement shall have the meaning assigned to them in
the attached Appendix.


 


NOW, THEREFORE, it is
hereby agreed as follows:


 


1.                         Grant of
Option.  The Corporation
hereby grants to Optionee, as of the Grant Date, an option to purchase up to
the number of Option Shares specified in the Grant Notice. The Option Shares
shall be purchasable from time to time during the option term specified in
Paragraph 2 at the Exercise Price.


 


2.                         Option Term.  This option shall have a term of ten
(10) years measured from the Grant Date and shall accordingly expire at
the close of business on the Expiration Date, unless sooner terminated in
accordance with Paragraph 5 or 6.


 


3.                         Limited
Transferability.  This option shall
be neither transferable nor assignable by Optionee other than by will or by the
laws of descent and distribution following Optionee’s death and may be exercised,
during Optionee’s lifetime, only by Optionee.


 


4.                         Dates of
Exercise.  This option shall become
exercisable for the Option Shares in one or more installments as specified in the Grant Notice. As the option
becomes exercisable for such installments, those installments shall accumulate
and the option shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the option term under
Paragraph 5 or 6.


 


5.                         Cessation
of Service.  The option term
specified in Paragraph 2 shall terminate (and this option shall cease to
be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:


 


(a)                                  Should
Optionee cease to remain in Service for any reason (other than death, Permanent
Disability or Misconduct) while this option is outstanding, then Optionee shall
have a period of three (3) months (commencing with the date of such
cessation of


 

















 


Service) during which to
exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date.


 


(b)                                 Should
Optionee die while this option is outstanding, then the personal representative
of Optionee’s estate or the person or persons to whom the option is transferred
pursuant to Optionee’s will or in accordance with the laws of descent and
distribution shall have the right to exercise this option. Such right shall
lapse, and this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from the date
of Optionee’s death or (ii) the Expiration Date.


 


(c)                                  Should
Optionee cease Service by reason of Permanent Disability while this option is
outstanding, then Optionee shall have a period of twelve (12) months
(commencing with the date of such cessation of Service) during which to
exercise this option. In no event shall this option be exercisable at any time
after the Expiration Date.


 


(d)                                 Should
Optionee’s Service be terminated for Misconduct, then this option shall
terminate immediately and cease to remain outstanding.


 


(e)                                  During
the applicable post-Service exercise period, this option may not be exercised
in the aggregate for more than the number of vested Option Shares for which the
option is exercisable at the time of Optionee’s cessation of Service. Upon the
expiration of such exercise period or (if earlier) upon the Expiration Date,
this option shall terminate and cease to be outstanding for any vested Option
Shares for which the option has not been exercised. However, this option shall,
immediately upon Optionee’s cessation of Service for any reason, terminate and
cease to be outstanding with respect to any Option Shares in which Optionee is
not otherwise at that time vested or for which this option is not otherwise at
that time exercisable.


 


6.                         Special Acceleration of Option.


 


(a)                                  This
option, to the extent outstanding at the time of a Corporate Transaction but
not otherwise fully exercisable, shall automatically accelerate so that this
option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all of the Option Shares at the time
subject to this option and may be exercised for any or all of those Option
Shares as fully-vested shares of Common Stock. No such acceleration of this
option, however, shall occur if and to the extent: (i) this option is, in
connection with the Corporate Transaction, either to be assumed by the
successor corporation (or parent thereof) or to be replaced with a comparable
option to purchase shares of the capital stock of the successor corporation (or
parent thereof) or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing on the Option Shares at the time of the Corporate Transaction (the
excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent pay-out in
accordance with the option exercise schedule set forth in the Grant
Notice. The determination of option comparability under clause (i) shall
be made by the Plan Administrator, and such determination shall be final,
binding and conclusive.


 


(b)                                 Immediately
following the Corporate Transaction, this option, to the extent not previously
exercised, shall terminate and cease to be outstanding or exercisable, except
to the extent assumed by the successor corporation (or parent thereof) in
connection with such Corporate Transaction.


 

















 


(c)                                  If
this option is assumed in connection with a Corporate Transaction, then this
option shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to Optionee in consummation of such Corporate Transaction had the
option been exercised immediately prior to such Corporate Transaction, and
appropriate adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.


 


(d)                                 This
Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.


 


7.                         Adjustment
in Option Shares.  Should any
change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate adjustments shall be made
to (i) the total number and/or class of securities subject to this option
and (ii) the Exercise Price in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder.


 


8.                         Stockholder Rights.  The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.


 


9.                         Manner of
Exercising Option.


 


(a)                                  In
order to exercise this option with respect to all or any part of the Option
Shares for which this option is at the time exercisable, Optionee (or any other
person or persons exercising the option) must take the following actions:


 


(i)                                     Execute
and deliver to the Corporation a Notice of Exercise for the Option Shares for
which the option is exercised.


 


(ii)                                  Pay
the aggregate Exercise Price for the purchased shares in one or more of the
following forms:


 


(A)                              cash
or check made payable to the Corporation;


 


(B)                                shares
of Common Stock held by Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or


 


(C)                                to
the extent this option is exercised for vested Option Shares, through a special
sale and remittance procedure pursuant to which Optionee (or any other person
or persons exercising the option) shall concurrently provide irrevocable
written instructions (I) to a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the Corporation,
out of the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate Exercise Price payable for the purchased shares plus all
applicable Federal,


 

















 


state and local income
and employment taxes required to be withheld by the Corporation by reason of
such exercise and (II) to the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale transaction. Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in
connection with the option exercise.


 


(iii)                               Furnish
to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this
option.


 


(iv)                              Make
appropriate arrangements with the Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all Federal, state and
local income and employment tax withholding requirements applicable to the
option exercise.


 


(b)                                 As
soon as practical after the Exercise Date, the Corporation shall issue to or on
behalf of Optionee (or any other person or persons exercising this option) a
certificate for the purchased Option Shares, with the appropriate legends
affixed thereto.


 


(c)                                  In
no event may this option be exercised for any fractional shares.


 


10.                   Compliance
with Laws and Regulations.


 


(a)                                  The
exercise of this option and the issuance of the Option Shares upon such
exercise shall be subject to compliance by the Corporation and Optionee with
all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.


 


(b)                                 The
inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and
sale of any Common Stock pursuant to this option shall relieve the Corporation
of any liability with respect to the non-issuance or sale of the Common Stock
as to which such approval shall not have been obtained. The Corporation,
however, shall use its best efforts to obtain all such approvals.


 


11.                   Successors and
Assigns.  Except to the extent
otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and Optionee, Optionee’s assigns and the legal
representatives, heirs and legatees of Optionee’s estate.


 


12.                   Notices.  Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee’s signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.


 

















 


13.                   Construction.  This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects
limited by and subject to the terms of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an
interest in this option.


 


14.                   Governing Law.  The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State’s conflict-of-laws rules.


 


15.                   Excess Shares.  If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares of Common Stock
which may without stockholder approval be issued under the Plan, then this
option shall be void with respect to those excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.


 


16.                   Additional
Terms Applicable to an Incentive Option. 
In the event this option is designated an Incentive Option in the Grant
Notice, the following terms and conditions shall also apply to the grant:


 


(a)                                  This
option shall cease to qualify for favorable tax treatment as an Incentive
Option if (and to the extent) this option is exercised for one or more Option
Shares: (A) more than three (3) months after the date Optionee ceases
to be an Employee for any reason other than death or Permanent Disability or
(B) more than twelve (12) months after the date Optionee ceases to be
an Employee by reason of Permanent Disability.


 


(b)                                 No
installment under this option shall qualify for favorable tax treatment as an
Incentive Option if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder would, when added to the aggregate value (determined
as of the respective date or dates of grant) of the Common Stock or other
securities for which this option or any other Incentive Options granted to
Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000)
in the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation
be exceeded in any calendar year, this option shall nevertheless become
exercisable for the excess shares in such calendar year as a Non-Statutory
Option.


 


(c)                                  Should
the exercisability of this option be accelerated upon a Corporate Transaction,
then this option shall qualify for favorable tax treatment as an Incentive
Option only to the extent the aggregate Fair Market Value (determined at the
Grant Date) of the Common Stock for which this option first becomes exercisable
in the calendar year in which the Corporate Transaction occurs does not, when
added to the aggregate value (determined as of the respective date or dates of
grant) of the Common Stock or other securities for which this option or one or
more other Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year,
exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the
calendar year of such Corporate Transaction, the option may nevertheless be
exercised for the excess shares in such calendar year as a Non-Statutory
Option.


 

















 


(d)                                 Should
Optionee hold, in addition to this option, one or more other options to
purchase Common Stock which become exercisable for the first time in the same
calendar year as this option, then the foregoing limitations on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.


 


17.                   Leave of
Absence.  The following provisions
shall apply upon the Optionee’s commencement of an authorized leave of absence:


 


(a)                                  The
exercise schedule in effect under the Grant Notice shall be frozen as of
the first day of the authorized leave, and the option shall not become
exercisable for any additional installments of the Option Shares during the
period Optionee remains on such leave.


 


(b)                                 Should
Optionee resume active Employee status within sixty (60) days after the
start date of the authorized leave, Optionee shall, for purposes of the
exercise schedule set forth in the Grant Notice, receive Service credit
for the entire period of such leave. If Optionee does not resume active
Employee status within such sixty (60)-day period, then no Service credit shall
be given for the period of the leave.


 


(c)                                  If
the option is designated as an Incentive Stock Option in the Grant Notice, then
the following additional provision shall apply:


 


If the leave of absence
continues for more than ninety (90) days, then the option shall
automatically convert to a Non-Statutory Option under the federal tax laws on
the day three (3) months and one (1) day following the ninety-first
(91st) day of such leave, unless the Optionee’s reemployment rights are
guaranteed by statute or by written agreement. Following any such conversion of
the option, all subsequent exercises of such option, whether effected before or
after Optionee’s return to active Employee status, shall result in an immediate
taxable event, and the Corporation shall be required to collect from Optionee
the federal, state and local income and employment withholding taxes applicable
to such exercise.


 


(d)                                 In
no event shall this option become exercisable for any additional Option Shares
or otherwise remain outstanding if Optionee does not resume Employee status
prior to the Expiration Date of the option term.


 

















 


EXHIBIT I


NOTICE OF EXERCISE


 


I hereby notify
Westaff, Inc. (the “Corporation”) that I elect to purchase shares of the
Corporation’s Common Stock (the “Purchased Shares”) at the option exercise
price of $2.35 per share (the “Exercise Price”) pursuant to an Incentive Stock
Option (the “Option”) granted to me under the Corporation’s 1996 Stock
Option/Stock Issuance Plan on March 1, 2002.


 


Concurrently with
the delivery of this Exercise Notice to the Corporation, I shall hereby pay to
the Corporation the Exercise Price for the Purchased Shares in accordance with
the provisions of my agreement with the Corporation (or other documents)
evidencing the Option and shall deliver whatever additional documents may be
required by such agreement as a condition for exercise. Alternatively, I may
utilize the special broker-dealer sale and remittance procedure specified in my
agreement to effect payment of the Exercise Price for any Purchased Shares in
which I am at the time vested.


 


 


	
             ,
  200  

  Date

  	
   

  	
   

  
	
   

  	
  Dwight S. Pedersen

  
	
   

  	
   

  	
  1800 Alma Avenue, #406

  
	
   

  	
  Address:

  	
  Walnut Creek, CA 94596

  



 


Print name in
exact manner it is to appear on the stock certificate:


Address to which
certificate is to be sent, if different from address above:


 


 


Social Security
Number:


Employee Number:


 

















 


APPENDIX


 


The following definitions
shall be in effect under the Agreement:


 


A.                                   Agreement
shall mean this Stock Option Agreement.


 


B.                                     Board
shall mean the Corporation’s Board of Directors.


 


C.                                     Code
shall mean the Internal Revenue Code of 1986, as amended.


 


D.                                    Common
Stock shall mean the Corporation’s common stock, with par value of $0.01
per share.


 


E.                                      Corporate
Transaction shall mean either of the following stockholder approved
transactions to which the Corporation is a party:


 


(a)                                  a
merger or consolidation in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation’s outstanding
securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction, or


 


(b)                                 the
sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the Corporation.


 


F.                                      Corporation
shall mean Westaff, Inc., a Delaware corporation.


 


G.                                     Employee
shall mean an individual who is in the employ of the Corporation (or any Parent
or Subsidiary), subject to the control and direction of the employer entity as
to both the work to be performed and the manner and method of performance.


 


H.                                    Exercise
Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.


 


I.                                         Exercise
Price shall mean the exercise price per share as specified in the Grant
Notice.


 


J.                                        Expiration
Date shall mean the date on which the option expires as specified in the
Grant Notice.


 


K.                                    Fair
Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:


 


(a)                                  If
the Common Stock is at the time traded on the Nasdaq National Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock
on the date in question, as the price is reported by the National Association
of Securities Dealers on the Nasdaq National Market or any successor system. If
there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.


 


(b)                                 If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on
the date in question on the Stock Exchange determined by the Plan Administrator
to be the primary


 

















 


market for the Common
Stock, as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.


 


L.                                      Grant
Date shall mean the date of grant of the option as specified in the Grant
Notice.


 


M.                                 Grant
Notice shall mean the Notice of Grant of Stock Option accompanying the
Agreement, pursuant to which Optionee has been’ informed of the basic terms of
the option evidenced hereby.


 


N.                                    Incentive
Option shall mean an option which satisfies the requirements of Code
Section 422.


 


O.                                    Misconduct
shall mean the commission of any act of fraud, embezzlement or dishonesty by
Optionee, any unauthorized use or disclosure by Optionee of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any other intentional misconduct by Optionee adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive
of all the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or discharge of Optionee
or any other individual in the Service of the Corporation (or any Parent or
Subsidiary).


 


P.                                      Non-Statutory
Option shall mean an option not intended to satisfy the requirements of
Code Section 422.


 


Q.                                    Notice
of Exercise shall mean the notice of exercise in the form attached hereto
as Exhibit I.


 


R.                                     Option
Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.


 


S.                                      Optionee
shall mean the person to whom the option is granted as specified in the Grant
Notice.


 


T.                                     Parent
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.


 


U.                                    Permanent
Disability shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which is expected to result in death or has lasted or can
be expected to last for a continuous period of twelve (12) months or more.


 


V.                                     Plan
shall mean the Corporation’s 1996 Stock Option/Stock Issuance Plan, as amended
and restated from time to time.


 


W.                                Plan
Administrator shall mean either the Board or a committee of Board members,
to the extent the committee is at the time responsible for the administration
of the Plan.


 

















 


X.                                    Service
shall mean the Optionee’s performance of services for the Corporation (or any
Parent or Subsidiary) in the capacity of an Employee, a non-employee member of
the board of directors or a consultant or independent advisor.


 


Y.                                     Stock Exchange shall mean the American Stock
Exchange or the New York Stock Exchange.


 


Z.                                     Subsidiary
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.