Document:

EXHIBIT 10.1

WESTAFF, INC.

EMPLOYEE STOCK PURCHASE
PLAN

(As Amended and Restated July 26,
2006)

I.                                         PURPOSE
OF THE PLAN

This Employee Stock Purchase
Plan is intended to promote the interests of Westaff, Inc. by providing
eligible employees with the opportunity to acquire a proprietary interest in
the Corporation through participation in a payroll-deduction based employee
stock purchase plan designed to qualify under Section 423 of the Code.

Capitalized terms herein shall
have the meanings assigned to such terms in the attached Appendix.

II.                                     ADMINISTRATION
OF THE PLAN

The Plan Administrator shall
have full authority to interpret and construe any provision of the Plan and to
adopt such rules and regulations for adminis­tering the Plan as it may deem
necessary in order to comply with the requirements of Code Section 423.  Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.

III.                                 STOCK
SUBJECT TO PLAN

A.                                    The
stock purchasable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares of Common Stock purchased on the open
market.  The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed five
hundred sixty-two thousand and five hundred (562,500) shares.

B.                                    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 maximum number and class of
securities issuable under the Plan, (ii) the maximum number and class of
securities purchasable per Participant on any one Purchase Date and (iii) the
number and class of securities and the price per share in effect under each
outstanding purchase right in order to prevent the dilution or enlargement of
benefits thereunder.

IV.                                PURCHASE
PERIODS

A.                                    Shares
of Common Stock shall be offered for purchase under the Plan through a series
of successive purchase periods until such time as (i) the maximum number of
shares of Common Stock available for issuance under the Plan shall have been
purchased or (ii) the Plan

 

shall have been sooner terminated. The Board shall
have the power to change the duration of purchase periods (including the
commencement and termination dates thereof) with respect to future purchase
periods without shareholder approval if such change is announced at least fifteen
(15) days prior to the scheduled beginning of the first purchase period to be
affected thereafter.

B.                                    Each purchase period shall have a duration of six
(6) months.  Purchase periods shall run
from the first business day in February to the last business day in July each
year and from the first business day in August each year to the last business
day in January of the following year. 
The first purchase period began on November 3, 1996 and ended on the
last business day in January 1997.

V.                                    ELIGIBILITY

A.                                    Each
individual who is an Eligible Employee on the start date of any purchase period
shall be eligible to participate in the Plan for that purchase period.

B.                                    To participate in the Plan for a particular
purchase period, the Eligible Employee must complete the Enrollment/Change Form
prescribed by the Plan Administrator (including a Stock Purchase Agreement) and
file such forms with the Plan Administrator (or its designate) on or before the
start date of the purchase period.

VI.                                PAYROLL
DEDUCTIONS

A.                                    The
payroll deduction authorized by the Parti­cipant for purposes of acquiring
shares of Common Stock under the Plan may be any multiple of one percent (1%)
of the Cash Earnings paid to the Participant during each purchase period, up to
a maximum of ten percent (10%).  The
deduction rate so authorized shall continue in effect for the entire purchase
period.  The Participant may not increase
his or her rate of payroll deduction during a purchase period.  However, the Participant may, at any time
during the purchase period, reduce his or her rate of payroll deduction to
become effective as soon as possible after filing the appropriate form with the
Plan Administrator.  The Participant may
not, however, effect more than one (1) such reduction per purchase period.

B.                                    Payroll
deductions shall begin on the first pay day following the start date of the
purchase period and shall (unless sooner terminated by the Participant)
continue through the pay day ending with or immediately prior to the last day
of the purchase period.  The amounts so
collected shall be credited to the Participant’s book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account.  The amounts collected from
the Participant shall not be held in any segregated account or trust fund and
may be commingled with the general assets of the Corporation and used for
general corporate purposes.

C.                                    Payroll
deductions shall automatically cease upon the termination of the Participant’s
purchase right in accord­ance with the provisions of the Plan.

D.                                    The
Participant’s acquisition of Common Stock under the Plan on any Purchase Date
shall neither limit nor require the Participant’s acquisition of Common Stock
on any subsequent Purchase Date.

 2
 

 

VII.                            PURCHASE
RIGHTS

A.                                    Grant
of Purchase Right.  A Participant
shall be granted a separate purchase right on the start date of each purchase
period in which he or she participates. 
The purchase right shall provide the Participant with the right to
purchase shares of Common Stock on the Purchase Date upon the terms set forth
below.  The Participant shall execute a
stock purchase agreement embodying such terms and such other provisions (not
inconsistent with the Plan) as the Plan Administrator may deem advisable.

Under
no circumstances shall purchase rights be granted under the Plan to any
Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.

B.                                    Exercise
of the Purchase Right.  Each
purchase right shall be automatically exercised on the Purchase Date, and
shares of Common Stock shall accordingly be purchased on behalf of each
Participant (other than any Participant whose payroll deductions have
previously been refunded pursuant to the Termination of Purchase Right
provisions below) on such date.  The purchase
shall be effected by applying the Participant’s payroll deductions for the
purchase period ending on such Purchase Date to the purchase of shares of
Common Stock (subject to the limitation on the maximum number of shares
purchasable per Participant on any one Purchase Date) at the purchase price in
effect for that purchase period.

C.                                    Purchase
Price.  The purchase price per
share at which Common Stock will be purchased on the Participant’s behalf on
each Purchase Date shall be equal to ninety percent (90%) of the lower
of (i) the Fair Market Value per share of Common Stock on the start date of the
purchase period or (ii) the Fair Market Value per share of Common Stock on that
Purchase Date.

D.                                    Number
of Purchasable Shares.  The
number of shares of Common Stock purchasable by a Participant on each Purchase
Date shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the purchase
period ending with that Purchase Date by the purchase price in effect for that
Purchase Date.  However, the maximum
number of shares of Common Stock purchasable per Participant on any one
Purchase Date shall not exceed one thousand one hundred twenty-five (1,125) shares,
subject to periodic adjustments in the event of certain changes in the
Corporation’s capitalization.

E.                                      Excess
Payroll Deductions.  Any payroll
deductions not applied to the purchase of shares of Common Stock on any
Purchase Date because they are not sufficient to purchase a whole share of
Common Stock shall be held for the purchase of Common Stock on the next
Purchase Date.  However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on
the Purchase Date shall be promptly refunded.

F.                                      Termination of Purchase Right.  The following provisions shall govern the
termination of outstanding purchase rights:

1.                                      A
Participant may, at any time prior to the last day of the purchase period,
terminate his or her outstanding purchase right by filing the appropriate form
with the

 3
 

 

Plan Administrator (or
its designate), and no further payroll deductions shall be collected from the
Participant with respect to the terminated purchase right.  Any payroll deductions collected during the
purchase period in which such termination occurs shall, at the Participant’s
election, be immediately refunded or held for the purchase of shares on the
next Purchase Date.  If no such election
is made at the time such purchase right is terminated, then the payroll
deductions collected with respect to the terminated right shall be refunded as
soon as possible.

2.                                      The
termination of such purchase right shall be irrevocable, and the Participant
may not subsequently rejoin the purchase period for which the terminated
purchase right was granted.  In order to
resume participation in any subsequent purchase period, such individual must
re-enroll in the Plan (by making a timely filing of the prescribed
Enrollment/Change Form) on or before the start date of the new purchase period.

3.                                      Should the Participant cease to remain an
Eligible Employee for any reason (including death, disability or change in
status) while his or her purchase right remains outstanding, then that purchase
right shall immediately terminate, and all of the Participant’s payroll
deductions for the purchase period in which the purchase right so terminates
shall be immediately refunded.  However,
should the Participant cease to remain in active service by reason of an
approved unpaid leave of absence, then the Participant shall have the right,
exercisable up until the last business day of the purchase period in which such
leave commences, to (a) withdraw all the payroll deductions collected to date
on his or her behalf during such purchase period or (b) have such funds held
for the purchase of shares on the next scheduled Purchase Date.  In no event, however, shall any further
payroll deductions be collected on the Participant’s behalf during such
leave.  Upon the Participant’s return to
active service, his or her payroll deductions under the Plan shall
automatically resume at the rate in effect at the time the leave began, unless
the Participant withdraws from the Plan prior to his or her return.

G.                                    Corporate
Transaction.  In the event of a
proposed Corporate Transaction, each outstanding purchase right shall be
assumed by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Plan Administrator, in the exercise of its
sole discretion and in lieu of such assumption, determines to shorten the
purchase period then in progress by setting a new Purchase Date (the “New
Purchase Date”).  If the Plan
Administrator shortens the purchase period then in progress in lieu of
assumption in the event of a Corporate Transaction, the Plan Administrator
shall notify each Participant in writing at least ten (10) business days prior
to the New Purchase Date, that the Purchase Date for the Participant’s option
has been changed to the New Purchase Date and that either:

1.                                      the
Participant’s purchase right will be exercised automatically on the New
Purchase Date, unless prior to such date the Participant has terminated his or
her purchase right as provided in Section VII.F.1; or

2.                                      the
Company shall pay to the Participant on the New Purchase Date an amount in
cash, cash equivalents, or property as determined by the Plan Administrator
that is equal to the difference in the Fair Market Value of the shares subject
to the purchase right and the purchase price due had the Participant’s purchase
right been exercised automatically under clause 1 above.

 4
 

 

For purposes of this Subsection, a purchase right granted
under the Plan shall be deemed to be assumed if, in connection with the
Corporate Transaction, the purchase right is replaced with a comparable purchase
right with respect to shares of the successor corporation or parent
thereof.  The determination of purchase
right comparability shall be made by the Plan Administrator prior to the
Corporate Transaction and its determination shall be final, binding and
conclusive on all persons.

H.                                    Proration
of Purchase Rights.  Should the
total number of shares of Common Stock which are to be purchased pursuant to
outstanding purchase rights on any particular date exceed the number of shares
then available for issuance under the Plan, the Plan Administrator shall make a
pro-rata allocation of the available shares on a uniform and nondiscriminatory
basis, and the payroll deductions of each Participant, to the extent in excess
of the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded.

I.                                         Assignability.  The purchase right shall be exercisable only
by the Participant and shall not be assignable or transferable by the
Participant.

J.                                      Stockholder Rights.  A Participant shall have no stockholder
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant’s behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.

VIII.                        ACCRUAL
LIMITATIONS

A.                                    No
Participant shall be entitled to accrue rights to acquire Common Stock pursuant
to any purchase right outstanding under this Plan if and to the extent such
accrual, when aggregated with (i) rights to purchase Common Stock accrued under
any other purchase right granted under this Plan and (ii) similar rights
accrued under other employee stock purchase plans (within the meaning of Code
Section 423) of the Corporation or any Corporate Affiliate, would
otherwise permit such Participant to purchase more than Twenty-Five Thousand
Dollars ($25,000) worth of stock of the Corporation or any Corporate Affiliate
(determined on the basis of the Fair Market Value of such stock on the date or
dates such rights are granted) for each calendar year such rights are at any
time outstanding.

B.                                    For purposes of applying such accrual
limitations, the following provisions shall be in effect:

1.                                      The
right to acquire Common Stock under each outstanding purchase right shall
accrue on the Purchase Date in effect for the purchase period for which such
right is granted.

2.                                      No
right to acquire Common Stock under any outstanding purchase right shall accrue
to the extent the Participant has already accrued in the same calendar year the
right to acquire Common Stock under one (1) or more other purchase rights at a
rate equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
(determined on the basis of the Fair Market Value per share on the date or
dates of grant) for each calendar year such rights were at any time
outstanding.

 5
 

 

3.                                      If by reason of such accrual limitations, any
purchase right of a Participant does not accrue for a particular purchase
period, then the payroll deductions which the Participant made during that
purchase period with respect to such purchase right shall be promptly refunded.

C.                                    In
the event there is any conflict between the provisions of this Article and
one or more provisions of the Plan or any instrument issued thereunder, the
provisions of this Article shall be controlling.

IX.                                EFFECTIVE
DATE AND TERM OF THE PLAN

A.                                    The
Plan was adopted by the Board on April 25, 1996 and became effective on
November 3, 1996, provided no purchase rights granted under the Plan
were to be exercised, and no shares of Common Stock were to be issued
hereunder, until (i) the Plan had been approved by the stockholders of the
Corporation and (ii) the Corporation had complied with all applicable
requirements of the 1933 Act (including the registration of the shares of
Common Stock issuable under the Plan on a Form S-8 registration statement filed
with the Securities and Exchange Commission), all applicable listing
requirements of any stock exchange (or the Nasdaq Global Market, if applicable)
on which the Common Stock is listed for trading and all other applicable
requirements established by law or regula­tion. 
In the event such stockholder approval were not obtained, or such
compliance were not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan was to have terminated and have no
further force or effect and all sums collected from Participants during the
initial purchase period hereunder were to have been refunded.

B.                                    Unless sooner terminated by the Board, the Plan
shall terminate upon the earliest to occur of (i) the last business
day in January 2017, (ii) the date on which all shares available for issuance
under the Plan shall have been sold pursuant to purchase rights exercised under
the Plan or (iii) the date on which all purchase rights are exercised in
connection with a Corporate Transaction. 
No further purchase rights shall be granted or exercised, and no further
payroll deductions shall be collected, under the Plan following such
termination.

X.                                    AMENDMENT
OF THE PLAN

The Board may alter, amend,
suspend or discontinue the Plan at any time to become effective immediately
following the close of any purchase period. 
However, the Board may not, without the approval of the Corporation’s
stockholders, (i) materially increase the number of shares of Common Stock
issuable under the Plan or the maximum number of shares purchasable per
Participant on any one Purchase Date, except for permissible adjustments in the
event of certain changes in the Corporation’s capitalization, (ii) alter the
purchase price formula so as to reduce the purchase price payable for the
shares of Common Stock purchasable under the Plan, or (iii) materially increase
the benefits accruing to Participants under the Plan or materially modify the
requirements for eligibility to participate in the Plan.

 6
 

 

On July 26, 2006, the Board
adopted and approved an amendment and restatement of the Plan to extend the
term of the Plan to the last business day of January, 2017 and, effective for
purchase periods commencing on and after August 1, 2006, to modify the purchase
price per share discount from eighty-five percent (85%) to ninety percent (90%)
and to expand the actions the Company may take in connection with a Corporate
Transaction and to modify the list of Participating Corporations who extend the
benefits of the Plan to their Eligible Employees.

XI.                                GENERAL
PROVISIONS

A.                                    All
costs and expenses incurred in the administration of the Plan shall be paid by
the Corporation.

B.                                    Nothing
in the Plan shall confer upon the Participant any right to continue in the
employ of the Corporation or any Corporate Affiliate for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Corporate Affiliate employing such person) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
such person’s employment at any time for any reason, with or without cause.

C.                                    The provisions of the Plan shall be governed by
the laws of the State of California without resort to that State’s
conflict-of-laws rules.

 7

Schedule A

CURRENT LIST OF PARTICIPATING CORPORATIONS

Domestic

Westaff, Inc., a
Delaware corporation

Westaff (USA),
Inc., a California corporation

Westaff Support,
Inc., a California corporation

 

APPENDIX

The following definitions shall be in effect under the
Plan:

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

B.                                    Cash
Earnings shall mean the (i) regular base salary paid to a Participant
by one or more Participating Companies during such individual’s period of
participation in one or more offering periods under the Plan plus (ii) any
pre-tax contributions made by the Participant to any Code Section 401(k) salary
deferral plan or any Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate Affiliate plus (iii)
all overtime payments, bonuses, commissions, current profit-sharing
distributions and other incentive-type payments.  However, Cash Earnings shall not include any contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant’s behalf by
the Corporation or any Corporate Affiliate under any employee benefit or
welfare plan now or hereafter established.

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

D.                                    Common
Stock shall mean the Corporation’s common stock.

E.                                      Corporate
Affiliate shall mean any parent or subsidiary corporation of the
Corporation (as determined in accordance with Code Section 424), whether now
existing or subsequently established.

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

1.                                      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;

2.                                      the
sale, transfer or other disposition of all or substantially all of the assets
of the Corporation in complete liquidation or dissolution of the Corporation;
or

3.                                      an
acquisition in a single or series of
related transactions by any person or related group of persons (other than the
Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities.

G.                                    Corporation
shall mean Westaff, Inc., a Delaware corporation, and any corporate successor
to all or substan­tially all of the assets or voting stock of Westaff, Inc.
which shall by appropriate action adopt the Plan.

H.                                    Eligible
Employee shall mean any person who is employed by a Participating
Corporation on a basis under which he or she is regularly expected to render
more than twenty

 

(20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).

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

1.                                      If
the Common Stock is are listed on one or more established stock exchanges or
national market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ
Global Market and The NASDAQ Capital Market, its
Fair Market Value shall be the closing sales price for such shares (or the
closing bid, if no sales were reported) as quoted on the principal exchange or
system on which the Common Stock is listed (as determined by the Plan Administrator)
on the date of determination (or, if no closing sales price or closing bid was
reported on that date, as applicable, on the last trading date such closing
sales price or closing bid was reported), as reported in The Wall Street
Journal or such other source as the Plan Administrator deems reliable;

2.                                      If
the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its Fair
Market Value shall be the closing sales price for such shares as quoted on such
system or by such securities dealer on the date of determination, but if
selling prices are not reported, the Fair Market Value of the Common Stock
shall be the mean between the high bid and low asked prices for the Common
Stock on the date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), as reported in The Wall
Street Journal or such other source as the Plan Administrator deems reliable;
or

3.                                      In the absence of an established market for the
Common Stock of the type described in (1) and (2), above, the Fair Market Value
thereof shall be determined by the Plan Administrator in good faith.

J.                                      1933
Act shall mean the Securities Act of 1933, as amended.

K.                                    Participant
shall mean any Eligible Employee of a Participating Corporation who is actively
participating in the Plan.

L.                                     Participating
Corporation shall mean the Corporation and such Corporate Affiliate or
Affiliates as may be authorized from time to time by the Board to extend the
benefits of the Plan to their Eligible Employees.  The current Participating Corporations in the
Plan are listed in attached Schedule A.

M.                                  Plan
shall mean the Corporation’s Employee Stock Purchase Plan, as set forth in this
document.

N.                                    Plan
Administrator shall mean the committee of two (2) or more non-employee
Board members appointed by the Board to administer the Plan.

 

O.                                   Purchase
Date shall mean the last business day of each purchase period.  The initial Purchase Date shall mean January
31, 1997.

 

EMPLOYEE STOCK PURCHASE PLAN (“ESPP”)

ENROLLMENT/CHANGE FORM

(check
one)

o               Regular Employee

o                Associate

	
  SECTION 1:

  	
   

  	
  Action

  	
   

  	
  Complete
  Sections

  	
   

  
	
   

  	
  o

  	
  New Enrollment

  	
   

  	
  2, 3, 6, 7 and sign attached Stock Purchase
  Agreement

  
	
  ACTION

  	
  o

  	
  Payroll Deduction Change

  	
   

  	
  2, 4 & 7 

  	
   

  
	
   

  	
  o

  	
  Terminate Payroll Deductions

  	
   

  	
  2, 5 & 7

  	
   

  
	
   

  	
  o

  	
  Beneficiary Change

  	
   

  	
  2, 6 & 7

  	
   

  
	
  SECTION 2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name              

  	
       

  	
       

  	
                                           

  	
       

  	
   

  
	
   

  	
   

  	
                            Last                                 

  	
  First                

  	
  MI                                     Dept # or
  Branch #

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PERSONAL

  	
   

  	
  Home or Mailing Address:
  

  	
       

  	
   

  
	
  DATA

  	
   

  	
   

   

  	
  Street

       

  	
   

       

  	
   

       

  	
   

  
	
   

  	
   

  	
                                                        
  

  	
  City

  	
  State                                            
  Zip Code

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social Security #                 -      -               

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3:

  	
   

  	
  Effective with the Purchase Period 

  	
  Payroll Deduction Amount       % of cash earnings*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NEW

  	
   

  	
   

  	
         *Must
  be a multiple of 1% up to a maximum of 10% of cash earnings

  
	
  ENROLLMENT

  	
   

  	
    

  	
   

  	
   

  
	
  SECTION 4:

  	
   

  	
  Effective with the Pay
  Period Beginning:

  	
           I
  authorize the following new level of payroll deduction: 

  	
   

  
	
   

  	
   

  	
   

  	
                    
  % of cash earnings*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PAYROLL

  	
   

  	
       

  	
   

  
	
  DEDUCTION

  	
   

  	
  Month, Day and Year

  	
          *Must
  be a multiple of 1% up to a maximum of 10% of cash earnings

  
	
  CHANGE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTE:

  	
  You may reduce your rate
  of payroll deductions once per purchase period to become effective as soon as
  possible following the filing of
  the change form.  You may also increase your rate of payroll deductions to become effective as of the start date of the
  next purchase period.

  	
   

  
	
  SECTION 5:

  	
   

  	
  Effective with the Pay
  Period Beginning:

  	
  Your election to
  terminate your payroll deductions for the

  	
   

  
	
   

  	
   

  	
   

  	
  balance of the purchase
  period cannot be changed, and you may not rejoin the same purchase period at
  a later date.  You will only be able to
  resume participation in the ESPP at the beginning of the next purchase period.

  	
   

  
	
  TERMINATE

  	
   

  	
       

  	
   

  	
   

  
	
  PAYROLL

  	
   

  	
  Month, Day and Year

  	
   

  	
   

  
	
  DEDUCTIONS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In connection with my
  voluntary termination of payroll deductions (or an approved leave of
  absence), I elect the following action regarding my ESPP payroll deductions
  to date in the current purchase period:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o Purchase shares of Westaff, Inc., at end
  of the period

  	
   

  
	
   

  	
   

  	
  OR

  	
   

  	
   

  
	
   

  	
   

  	
  o Refund ESPP payroll deductions collected

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTE:

  	
  If your employment
  terminates for any reason or your eligibility status changes

  (<20 hrs/wk or <5 months/yr), you will immediately cease to participate
  in the ESPP and your ESPP payroll deductions collected in that purchase
  period will automatically be refunded to you.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6:

  	
   

  	
  Beneficiary(ies)
  Name

  	
  Address                                               
  Relationship of Beneficiary (ies)

  
	
   

  	
   

  	
   

  	
   

  
	
  BENEFICIARY

  	
   

  	
   

  	
   

  	
       

  	
       

  
	
  INFORMATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
       

  	
       

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature of Employee

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
																		

Please
return original or fax to Human Resources #9913 Fax # (925) 952-2525                        Rev.07/06

 

WESTAFF, INC.

STOCK PURCHASE AGREEMENT

I hereby elect to participate in the Employee Stock
Purchase Plan (the “ESPP”) beginning with the purchase period specified below,
and I hereby subscribe to purchase shares of Common Stock of Westaff, Inc. (the
“Corporation”) in accordance with the provisions of this Agreement and the
ESPP.  I hereby authorize payroll
deductions from each of my paychecks following my entry into the ESPP in the 1%
multiple of my cash earnings (not to exceed a maximum of 10%) specified in my
attached Enrollment/Change Form.

Purchase periods under the ESPP will run from the
first business day in February to the last business day in July each year, and
from the first business day in August each year to the last business day in
January of the following year. My participation will automatically remain in
effect from one purchase period to the next in accordance with this Agreement
and my payroll deduction authorization, unless I withdraw from the ESPP or
change the rate of my payroll deduction or unless my employment status
changes.  I may reduce the rate of my
payroll deductions once per purchase period, and I may increase the rate of my
payroll deductions to become effective at the start of any subsequent purchase
period.

My payroll deductions will be accumulated for the
purchase of shares of the Corporation’s Common Stock on the last business day
of each purchase period.  The purchase
price per share shall be equal to 90% of the lower of (i) the fair
market value per share of Common Stock on the start date of the purchase period
or (ii) the fair market value per share on the last day of that purchase
period.  I will also be subject to ESPP
restrictions (i) limiting the maximum number of shares which I may purchase on
any one purchase date to 1,125 shares, for a maximum of 2,250 shares per
calendar year and (ii) prohibiting me from purchasing more than $25,000 worth
of Common Stock for each calendar year my purchase right remains outstanding.

I may withdraw from the ESPP at any time prior to the
last business day of a purchase period and elect either to have the Corporation
refund all my payroll deductions for that purchase period or to have those
payroll deductions applied to the purchase of shares of the Corporation’s
Common Stock at the end of such period. 
However, I may not rejoin that particular purchase period at any later
date.  Upon the termination of my
employment for any reason, including death or disability, or my loss of
eligible employee status, my participation in the ESPP will immediately cease
and all my payroll deductions for the purchase period in which my employment
terminates or my loss of eligibility occurs will automatically be refunded.

If I take an unpaid leave of absence, my payroll
deductions will immediately cease, and any payroll deductions for the purchase
period in which my leave begins will, at my election, either be refunded or
applied to the purchase of shares of Common Stock at the end of that purchase
period. Upon my return to active service, my payroll deductions will
automatically resume at the rate in effect when my leave began.

A stock certificate for the shares purchased on my
behalf at the end of each purchase period will automatically be deposited into
a brokerage account which the Corporation will designate and open on my behalf.
 I will promptly notify the Corporation
of any sale or disposition of my ESPP shares, and I will satisfy all applicable
income and employment tax withholding requirements at the time of such sale or
disposition.

The Corporation has the right, exercisable in its sole
discretion, to amend or terminate the ESPP at any time, with such amendment or
termination to become effective immediately following the exercise of
outstanding purchase rights at the end of any current purchase period.  Should the Corporation elect to terminate the
ESPP, I will have no further rights to purchase shares of Common Stock pursuant
to this Agreement.

I have received a
copy of the official Plan Summary and Prospectus summarizing the major features
of the ESPP.  I have read this Agreement
and the Plan Summary and Prospectus and hereby agree to be bound by the terms
of both this Agreement and the ESPP.  The
effectiveness of this Agreement is dependent upon my eligibility to participate
in the ESPP.

Date:                                                                                                                                                                                       

                                                                                                                Signature
of Employee

Entry Date:                                                                                            Printed Name:                                                       

 

Please
return original or fax to Human Resources #9913 Fax # (925) 952-2525                        Rev.07/06EXHIBIT 10.2

WESTAFF,
INC.

INTERNATIONAL
EMPLOYEE STOCK PURCHASE PLAN

(As Amended and Restated July 26, 2006)

I.                                         PURPOSE
OF THE PLAN

This International Employee
Stock Purchase Plan is intended to promote the interests of Westaff, Inc. by
providing eligible employees of the Corporation’s Foreign Subsidiaries with the
opportunity to acquire a proprietary interest in the Corporation through the
purchase of shares of the Corporation’s Common Stock at periodic intervals.

Capitalized terms herein shall
have the meanings assigned to such terms in the attached Appendix.

II.                                     ADMINISTRATION
OF THE PLAN

The Plan Administrator shall
have full authority to interpret and construe any provision of the Plan and to
adopt such rules and regulations for adminis­tering the Plan as it may deem
necessary.  Decisions of the Plan
Administrator shall be final and binding on all parties having an interest in
the Plan.

III.                                 STOCK
SUBJECT TO PLAN

A.                                    The
stock purchasable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares of Common Stock purchased on the open
market.  The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed one
hundred eighty-seven thousand and five hundred (187,500) shares.

B.                                    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 maximum number and class of securities issuable under the Plan, (ii)
the maximum number and class of securities purchasable per Participant on any
one Purchase Date and (iii) the number and class of securities and the price
per share in effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.

 

IV.                                PURCHASE
PERIODS

A.                                    Shares
of Common Stock shall be offered for purchase under the Plan through a series
of successive purchase periods until such time as (i) the maximum number of
shares of Common Stock available for issuance under the Plan shall have been
purchased or (ii) the Plan shall have been sooner terminated.  The Board shall have the power to change the
duration of purchase periods (including the commencement and termination dates
thereof) with respect to future purchase periods without shareholder approval
if such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first purchase period to be affected thereafter.

B.                                    Each purchase period shall have a duration of six
(6) months.  Purchase periods shall run
from the first business day in February to the last business day in July and
from the first business day in August to the last business day in January of
the following year.  The first purchase
period began on November 3, 1996 and ended on the last business day in January
1997.

V.                                    ELIGIBILITY

A.                                    Each
individual who is an Eligible Employee on the start date of any purchase period
shall be eligible to participate in the Plan for that purchase period.  However, each individual who is an Eligible
Employee of a Foreign Subsidiary which designates an Effective Date that is not
the start date of a purchase period shall be eligible to participate in the
Plan for the purchase period during which the Effective Date occurs beginning
with such Effective Date.

B.                                    To participate in the Plan for a particular
purchase period, the Eligible Employee must complete the enrollment/change
forms prescribed by the Plan Administrator and file such forms with the Plan
Administrator (or its designate) on or before the start date of the purchase
period.

VI.                                PAYMENT
FOR THE SHARES

A.                                    Except
to the extent otherwise provided in the Plan (or any Addendum thereto) or
authorized by the Plan Administrator, the purchase price for the shares of
Common Stock acquired under the Plan shall be paid from accumulated payroll
deductions authorized by the Participant.

B.                                    The
payroll deduction authorized by the Parti­cipant for purposes of acquiring
shares of Common Stock under the Plan may be any multiple of one percent (1%)
of the Cash Earnings paid to the Participant during each purchase period, up to
a maximum of ten percent (10%).  The deduction
rate so authorized shall continue in effect for the entire purchase
period.  The Participant may not increase
his or her rate of payroll deduction during a purchase period.  However, the Participant may, at any time
during the purchase period, reduce his or her rate of payroll deduction to
become effective as soon as possible after filing the appropriate form with the
Plan Administrator.  The Participant may
not, however, effect more than one (1) such reduction per purchase period.

C.                                    Payroll
deductions shall begin on the first pay day following the start date of the
purchase period and shall (unless sooner terminated by the Participant)
continue through the pay day ending with or immediately prior to the last day
of the purchase period.  The payroll

 2
 

 

deductions so collected shall be credited to the
Participant’s book account under the Plan, initially in the currency in which
paid by the Foreign Subsidiary.  Except
to the extent otherwise provided by the Plan Administrator (or any Addendum to
the Plan), no interest shall be paid on the balance from time to time
outstanding in such account and the amounts collected from the Participant
shall not be held in any segregated account or trust fund and may be commingled
with the general assets of the Corporation and used for general corporate
purposes.

D.                                    The
payroll deductions credited to each Participant’s book account during each
calendar month shall be converted into U.S. Dollars on the Exchange Date for
that month on the basis of the exchange rate in effect on such date.  The Plan Administrator shall have the
absolute discretion to determine the applicable exchange rate to be in effect
for each Exchange Date by any reasonable method (including, without limitation,
the exchange rate actually available in the ordinary course of business on such
date).  Any changes or fluctuations in
the exchange rate at which the payroll deductions collected on the Participant’s
behalf are converted into U.S. Dollars on each Exchange Date shall be borne
solely by the Participant.

E.                                      Payroll
deductions shall automatically cease upon the termination of the Participant’s
purchase right in accord­ance with the provisions of the Plan.

F.                                      The Participant’s acquisition of Common Stock
under the Plan on any Purchase Date shall neither limit nor require the
Participant’s acquisition of Common Stock on any subsequent Purchase Date.

VII.                            PURCHASE
RIGHTS

A.                                    Grant
of Purchase Right.  A Participant
shall be granted a separate purchase right on the start date of each purchase
period in which he or she participates. 
The purchase right shall provide the Participant with the right to
purchase shares of Common Stock on the Purchase Date upon the terms set forth
below.  The Participant shall execute a
stock purchase agreement embodying such terms and such other provisions (not
inconsistent with the Plan) as the Plan Administrator may deem advisable.

Under no circumstances shall
purchase rights be granted under the Plan to any Eligible Employee if such
individual would, immediately after the grant, own (within the meaning of Code
Section 424(d)) or hold outstanding options or other rights to purchase, stock
possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Corporation or any Corporate Affiliate.

B.                                    Exercise
of the Purchase Right.  Each
purchase right shall be automatically exercised on the Purchase Date, and
shares of Common Stock shall accordingly be purchased on behalf of each
Participant (other than any Participant whose payroll deductions have
previously been refunded pursuant to the Termination of Purchase Right
provisions below) on such date.  The
purchase shall be effected by applying the Participant’s payroll deductions (as
converted into U.S. Dollars) for the purchase period ending on such Purchase
Date to the purchase of shares of Common Stock (subject to the limitation on
the maximum number of shares purchasable per Participant on any one Purchase
Date) at the purchase price in effect for that purchase period.

 3
 

 

C.                                    Purchase
Price.  The purchase price per
share at which Common Stock will be purchased on the Participant’s behalf on
each Purchase Date shall be equal to ninety percent (90%) of the lower
of (i) the Fair Market Value per share of Common Stock on the start date of the
purchase period or (ii) the Fair Market Value per share of Common Stock on that
Purchase Date.

D.                                    Number
of Purchasable Shares.  The
number of shares of Common Stock purchasable by a Participant on each Purchase
Date shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions (as converted into
U.S. Dollars) during the purchase period ending with that Purchase Date by the
purchase price in effect for that Purchase Date.  However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed one thousand one hundred twenty-five (1,125) shares, subject to periodic
adjustments in the event of certain changes in the Corporation’s
capitalization.

E.                                      Excess
Payroll Deductions.  Any payroll
deductions not applied to the purchase of shares of Common Stock on any
Purchase Date because they are not sufficient to purchase a whole share of
Common Stock shall be held for the purchase of Common Stock on the next
Purchase Date.  However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on
the Purchase Date shall be promptly refunded in the currency in which
collected.

F.                                      Termination
of Purchase Right.  The following
provisions shall govern the termination of outstanding purchase rights:

1.                                      A
Participant may, at any time prior to the last day of the purchase period,
terminate his or her outstanding purchase right by filing the appropriate form
with the Plan Administrator (or its designate), and no further payroll
deductions shall be collected from the Participant with respect to the
terminated purchase right.  Any payroll
deductions collected during the purchase period in which such termination
occurs shall, at the Participant’s election, be immediately refunded in the
currency in which collected or held for the purchase of shares on the next
Purchase Date.  If no such election is
made at the time such purchase right is terminated, then the payroll deductions
collected with respect to the terminated right shall be refunded as soon as
possible.

2.                                      The
termination of such purchase right shall be irrevocable, and the Participant
may not subsequently rejoin the purchase period for which the terminated
purchase right was granted.  In order to
resume participation in any subsequent purchase period, such individual must
re-enroll in the Plan (by making a timely filing of the prescribed enrollment
forms) on or before the start date of the new purchase period.

3.                                      Should
the Participant cease to remain an Eligible Employee for any reason (including
death, disability or change in status) while his or her purchase right remains
outstanding, then that purchase right shall immediately terminate, and all of
the Participant’s payroll deductions for the purchase period in which the
purchase right so terminates shall be immediately refunded in the currency in
which collected.  However, should the
Participant cease to remain in active service by reason of an approved unpaid
leave of absence, then the Participant shall have the right, exercisable up
until the last

 4
 

 

business day of the
purchase period in which such leave commences, to (a) withdraw all the payroll
deductions collected to date on his or her behalf during such purchase period
or (b) have such funds held for the purchase of shares on the next scheduled
Purchase Date.  In no event, however,
shall any further payroll deductions be collected on the Participant’s behalf
during such leave.  Upon the Participant’s
return to active service, his or her payroll deductions under the Plan shall
automatically resume at the rate in effect at the time the leave began, unless
the Participant withdraws from the Plan prior to his or her return.

G.                                    Transfer
of Employment.  In the event that
a Participant who is an Employee of a Foreign Subsidiary is transferred and
becomes an Employee of the Corporation during a purchase period under the Plan,
such individual shall continue to remain a Participant in the Plan and payroll
deductions shall continue to be collected until the next purchase date as if
the Participant had remained an Employee of the Foreign Subsidiary.

In
the event that an Employee of the Corporation who is a participant in the U.S.
Plan is transferred and becomes an Employee of a Foreign Subsidiary during a
purchase period in effect under the U.S. Plan, such individual shall
automatically become a Participant under the Plan for the duration of the
purchase period in effect at that time under the Plan and the balance in such
individual’s book account maintained under the U.S. Plan shall be transferred
as a balance to a book account opened for such individual under the Plan.  Such balance, together with all other payroll
deductions collected from such individual by the Foreign Subsidiary for the
remainder of the purchase period under the Plan (as converted into U.S.
Dollars), shall be applied on the next purchase date to the purchase of Stock
under the Plan.

H.                                    Corporate
Transaction.  In the event of a
proposed Corporate Transaction, each outstanding purchase right shall be
assumed by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Plan Administrator, in the exercise of its
sole discretion and in lieu of such assumption, determines to shorten the
purchase period then in progress by setting a new Purchase Date (the “New
Purchase Date”).  If the Plan
Administrator shortens the purchase period then in progress in lieu of
assumption in the event of a Corporate Transaction, the Plan Administrator
shall notify each Participant in writing at least ten (10) business days prior
to the New Purchase Date, that the Purchase Date for the Participant’s option
has been changed to the New Purchase Date and that either:

1.                                      the
Participant’s purchase right will be exercised automatically on the New
Purchase Date, unless prior to such date the Participant has terminated his or
her purchase right as provided in Section VII.F.1; or

2.                                      the
Company shall pay to the Participant on the New Purchase Date an amount in
cash, cash equivalents, or property as determined by the Plan Administrator
that is equal to the difference in the Fair Market Value of the shares subject
to the purchase right and the purchase price due had the Participant’s purchase
right been exercised automatically under clause 1 above.

For purposes of this
Subsection, a purchase right granted under the Plan shall be deemed to be
assumed if, in connection with the Corporate Transaction, the purchase right is
replaced with a comparable purchase right with respect to shares of the
successor corporation or parent

 5
 

 

thereof.  The determination of
purchase right comparability shall be made by the Plan Administrator prior to
the Corporate Transaction and its determination shall be final, binding and
conclusive on all persons.

I.                                         Proration
of Purchase Rights.  Should the
total number of shares of Common Stock which are to be purchased pursuant to
outstanding purchase rights on any particular date exceed the number of shares
then available for issuance under the Plan, the Plan Administrator shall make a
pro-rata allocation of the available shares on a uniform and nondiscriminatory
basis, and the payroll deductions of each Participant, to the extent in excess
of the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded.

J.                                      Assignability.  The purchase right shall be exercisable only
by the Participant and shall not be assignable or transferable by the
Participant.

K.                                    Stockholder
Rights.  A Participant shall have
no stockholder rights with respect to the shares subject to his or her
outstanding purchase right until the shares are purchased on the Participant’s
behalf in accordance with the provisions of the Plan and the Participant has
become a holder of record of the purchased shares.

VIII.                        ACCRUAL
LIMITATIONS

A.                                    No
Participant shall be entitled to accrue rights to acquire Common Stock pursuant
to any purchase right outstanding under this Plan if and to the extent such accrual,
when aggregated with (i) rights to purchase Common Stock accrued under any
other purchase right granted under this Plan and (ii) similar rights accrued
under other employee stock purchase plans (within the meaning of Code
Section 423) of the Corporation or any Corporate Affiliate, would
otherwise permit such Participant to purchase more than Twenty-Five Thousand
U.S. Dollars (U.S. $25,000) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value of such stock on
the date or dates such rights are granted) for each calendar year such rights
are at any time outstanding.

B.                                    For purposes of applying such accrual
limitations, the following provisions shall be in effect:

1.                                      The
right to acquire Common Stock under each outstanding purchase right shall
accrue on the Purchase Date in effect for the purchase period for which such
right is granted.

2.                                      No right to acquire Common Stock under any
outstanding purchase right shall accrue to the extent the Participant has
already accrued in the same calendar year the right to acquire Common Stock
under one (1) or more other purchase rights at a rate equal to Twenty-Five
Thousand U.S. Dollars (U.S. $25,000) worth of Common Stock (determined on the
basis of the Fair Market Value per share on the date or dates of grant) for
each calendar year such rights were at any time outstanding.

C.                                    If
by reason of such accrual limitations, any purchase right of a Participant does
not accrue for a particular purchase period, then the payroll deductions which
the Participant made during that purchase period with respect to such purchase
right shall be promptly refunded.

 6
 

 

D.                                    In the event there is any conflict between the
provisions of this Article and one or more provisions of the Plan or any
instrument issued thereunder, the provisions of this Article shall be
controlling.

IX.                                EFFECTIVE
DATE AND TERM OF THE PLAN

A.                                    The
Plan was adopted by the Board on October 15, 1996 and became effective on
November 3, 1996, provided no purchase rights granted under the Plan
were to be exercised, and no shares of Common Stock were to be issued
hereunder, until the Corporation had complied with all applicable requirements
of the 1933 Act (including the registration of the shares of Common Stock
issuable under the Plan on a Form S-8 registration statement filed with the
Securities and Exchange Commission), all applicable listing requirements of any
stock exchange (or the Nasdaq Global Market, if applicable) on which the Common
Stock is listed for trading and all other applicable requirements established
by law or regula­tion.  In the event such
compliance were not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan was to have terminated and have no
further force or effect and all sums collected from Participants during the
initial purchase period hereunder were to have been refunded.

B.                                    Unless
sooner terminated by the Board, the Plan shall terminate upon the earliest
to occur of (i) the last business day in January 2017, (ii) the date on
which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction.  No further purchase rights shall be granted
or exercised, and no further payroll deductions shall be collected, under the
Plan following such termination.

X.                                    AMENDMENT
OF THE PLAN

The Board may alter,
amend, suspend or discontinue the Plan at any time to become effective
immediately following the close of any purchase period.

On July 26, 2006, the Board
adopted and approved an amendment and restatement of the Plan to extend the
term of the Plan to the last business day of January, 2017 and, effective for
purchase periods commencing on and after August 1, 2006, to modify the purchase
price per share discount from eighty-five percent (85%) to ninety percent (90%)
and to expand the actions the Company may take in connection with a Corporate
Transaction and to modify the list of Participating Corporations who extend the
benefits of the Plan to their Eligible Employees.

XI.                                GENERAL
PROVISIONS

A.                                    All
costs and expenses incurred in the administration of the Plan shall be paid by
the Corporation.

B.                                    Nothing
in the Plan shall confer upon the Participant any right to continue in the
employ of the Corporation or any Corporate Affiliate for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Corporate Affiliate employing such person) or of the
Participant, which rights are hereby expressly reserved

 7
 

 

by each, to terminate such person’s employment at any
time for any reason, with or without cause.

C.                                    Except
to the extent otherwise provided in any Addendum to the Plan, the provisions of
the Plan shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules.

D.                                    A
Foreign Subsidiary or the Plan Administrator, as the case may be, shall have
the right to deduct from any payment to be made under this Plan, or to
otherwise require, prior to the issuance or delivery of any shares of Common
Stock or the payment of any cash, payment by each Participant of any tax
required by applicable law to be withheld.

E.                                      Additional
provisions for individual Foreign Subsidiaries may be incorporated in one or
more Addenda to the Plan.  Such Addenda
shall have full force and effect with respect to the Foreign Subsidiaries to
which they apply.  In the event of a
conflict between the provisions of such an Addendum and one or more other
provisions of the Plan, the provisions of the Addendum shall be controlling.

 8

 

Schedule A

CURRENT
LIST OF PARTICIPATING COMPANIES

Westaff (U.K.)
Limited

Westaff
(Australia) Pty Ltd

Westaff NZ Limited

 

APPENDIX

The following definitions shall be in effect under the
Plan:

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

B.                                    Cash
Earnings shall mean the (i) regular base salary paid to a Participant
by one or more Foreign Subsidiaries during such individual’s period of
participation in one or more purchase periods under the Plan plus (ii) all
overtime payments, bonuses, commissions, current profit-sharing distributions
and other incentive-type payments. 
However, Cash Earnings shall not include any
contributions made on the Participant’s behalf by the Corporation or any
Corporate Affiliate under any employee benefit or welfare plan now or hereafter
established.

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

D.                                    Common
Stock shall mean the Corporation’s common stock.

E.                                      Corporate
Affiliate shall mean any parent or subsidiary corporation of the
Corporation, whether now existing or subsequently established.

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

1.                                      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;

2.                                      the
sale, transfer or other disposition of all or substantially all of the assets
of the Corporation in complete liquidation or dissolution of the Corporation;
or

3.                                      an
acquisition in a single or series of
related transactions by any person or related group of persons (other than the
Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities.

G.                                    Corporation
shall mean Westaff, Inc., a Delaware corporation, and any corporate successor
to all or substan­tially all of the assets or voting stock of Westaff, Inc.
which shall by appropriate action adopt the Plan.

H.                                    Effective
Date shall mean November 3, 1996. 
Any Foreign Subsidiary which elects, with the approval of the Board, to
extend the benefits of this Plan to its employees after such Effective Date
shall designate a subsequent Effective Date with respect to its
employee-Participants.

I.                                         Eligible
Employee shall mean any person who is employed by a Participating
Corporation as a regular staff employee (and not temporary) on a basis under
which he or she is regularly expected to render more than twenty (20) hours of
service per week for more than five (5) months per calendar year for earnings
considered wages under Code Section 3401(a).

 

J.                                      Exchange
Date shall mean the last U.S. business day of each month during a
purchase period, on which date the foreign currency payroll deductions
collected on behalf of the Participants during that month are to be converted
into U.S. Dollars.

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

1.                                      If
the Common Stock is are listed on one or more established stock exchanges or
national market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ
Global Market and The NASDAQ Capital Market, its
Fair Market Value shall be the closing sales price for such shares (or the
closing bid, if no sales were reported) as quoted on the principal exchange or
system on which the Common Stock is listed (as determined by the Plan
Administrator) on the date of determination (or, if no closing sales price or
closing bid was reported on that date, as applicable, on the last trading date
such closing sales price or closing bid was reported), as reported in The Wall
Street Journal or such other source as the Plan Administrator deems reliable;

2.                                      If
the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its
Fair Market Value shall be the closing sales price for such shares as quoted on
such system or by such securities dealer on the date of determination, but if
selling prices are not reported, the Fair Market Value of the Common Stock
shall be the mean between the high bid and low asked prices for the Common
Stock on the date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), as reported in The Wall
Street Journal or such other source as the Plan Administrator deems reliable;
or

3.                                      In the absence of an established market for the
Common Stock of the type described in (1) and (2), above, the Fair Market Value
thereof shall be determined by the Plan Administrator in good faith.

L.                                     Foreign
Subsidiary shall mean any non-U.S. Corporate Affiliate or Affiliates as
may be authorized from time to time by the Board to extend the benefits of the
Plan to their Eligible Employees.  The
Foreign Subsidiaries participating in the Plan as of the Effective Date are
listed in attached Schedule A.

M.                                  1933
Act shall mean the Securities Act of 1933, as amended.

N.                                    Participant
shall mean any Eligible Employee of a Participating Corporation who is actively
participating in the Plan.

O.                                   Plan
shall mean the Corporation’s International Employee Stock Purchase Plan, as set
forth in this document.

P.                                     Plan
Administrator shall mean the committee of two (2) or more non-employee
Board members appointed by the Board to administer the Plan.

Q.                                   Purchase
Date shall mean the last business day of each purchase period.  The initial Purchase Date shall mean January
31, 1997.

 2

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