Document:

Exhibit
10.21

 

ROBERT HALF INTERNATIONAL INC.

 

RESTRICTED STOCK PLAN FOR FIELD
EMPLOYEES

 

(As Amended and
Restated Effective May 9, 2002)

 

                                     1.             DEFINITIONS.  As used in this Plan, the following terms
shall have the meanings set forth below:

 

                                                     1.1.             Administrator means the
Board or a committee of one or more directors appointed by the Board.

 

                                                     1.2.             Board means the Board of
Directors of the Company.

 

                                                     1.3.             Company means Robert Half
International Inc., a Delaware corporation.

 

                                                     1.4.             Continuous Employment means
employment with the Company or any Subsidiary as an Eligible Employee without
any termination or leave of absence, except for a leave of absence approved by
the Company or any Subsidiary which is less than six consecutive months in
duration.

 

                                                     1.5.             Disability or Disabled shall
mean (i) a physical or mental condition which, in the judgment of the
Administrator based on competent medical evidence satisfactory to the
Administrator (including, if required by the Administrator, medical evidence
obtained by an examination conducted by a physician selected by the
Administrator), renders Participant unable to engage in any substantial gainful
activity for the Company and which condition is likely to result in death or to
be of long, continued and indefinite duration, or (ii) a judicial declaration
of incompetence.

 

                                                     1.6.             Eligible Employee means an
employee of or consultant to the Company or any Subsidiary who, as determined
by the Administrator in its sole discretion, has and exercises field functions
and responsibilities.  Eligible Employee
shall not include any individual who, on the Grant Date, is subject to the
provisions of Section 16 of the Exchange Act with respect to transactions in
the Company’s securities.

 

                                                     1.7.             Exchange Act means the
Securities Exchange Act of 1934, as amended.

 

                                                     1.8.             Grant Date means the
effective date on which a Restricted Stock Grant is made to an Eligible
Employee.

 

                                                     1.9.             Issue Date means the date on
which shares of Stock subject to a Restricted Stock Grant are issued or transferred
by the Company to the account of an Eligible Employee who has received such
grant.

 

 

 

                                                     1.10.           Participant means an Eligible
Employee to whom a Restricted Stock Grant is granted under the Plan.

 

                                                     1.11.           Plan means this Restricted
Stock Plan for Field Employees.

 

                                                     1.12.           Restricted Stock Grant means a
grant described in Section 8 of the Plan which is made by the Company and
approved by the Administrator under and pursuant to the Plan.

 

                                                     1.13.           Securities Act means the
Securities Act of 1933, as amended.

 

                                                     1.14.           Stock means the Common Stock,
$.001 par value, of the Company.

 

                                                     1.15.           Subsidiary means a
“subsidiary” corporation as defined in Section 425(f) of the Internal Revenue
Code of 1986, as amended.

 

                                                     1.16.           Vesting Date means an
anniversary of the Grant Date, or such other date as shall be established by
the Administrator.

 

                                                     1.17.           Withholding Taxes means any
applicable federal, state and local income and other employment taxes which the
Company is required to withhold in connection with the lapse of restrictions on
Stock subject to a Restricted Stock Grant.

 

                                     2.             PURPOSE.  The purpose of the Plan is to aid the
Company and its Subsidiaries in attracting, retaining and motivating field
employees with outstanding ability, competence and potential.  The Plan provides such employees with a
proprietary interest in the Company’s success and progress by granting to them
shares of Stock in accordance with the terms and conditions set forth below.

 

                                     3.             STOCK SUBJECT TO THE PLAN.  A total of 6,680,000 shares of Stock,
subject to adjustment as provided in Section 9 of the Plan, all of which shall
be treasury shares, shall be reserved for issuance under this Plan.  If, on or before termination of the Plan,
any shares of Stock shall be reacquired by the Company pursuant to the
termination provisions described in Section 11 of the Plan, the provisions
described in Section 8.10 or in the instruments evidencing the making of
Restricted Stock Grants, such shares may again be granted under the Plan.

 

                                     4.             ADMINISTRATION.  The Plan shall be administered by the
Administrator.  Subject to all the
applicable provisions of the Plan, the Administrator is authorized to make
Restricted Stock Grants in accordance with the Plan, to construe and interpret
the Plan, to prescribe, amend, and rescind rules and regulations relating to
the 

 

 

 

 

Plan, and to make
all determinations and to take all actions necessary or advisable for the
Plan’s administration.  Whenever the
Plan authorizes or requires the Administrator to take any action, make any
determination or decision, or form any opinion, then any such action,
determination, decision or opinion by or of the Administrator shall be in the
absolute discretion of the Administrator and shall be final and binding upon
all persons in interest, including the Company, its stockholders, and all
Participants.  To the extent permitted
by applicable law, the Administrator may delegate its authority to one or more
individuals or subcommittees.

 

                                     5.             PARTICIPANTS.  From time to time the Administrator shall,
in its sole discretion, but subject to all of the provisions of the Plan,
determine which Eligible Employees will be granted Restricted Stock Grants
under the Plan, the number of shares of Stock to be granted to each such
Eligible Employee and the terms, conditions and restrictions of each such
Restricted Stock Grant.  In making such
determinations, the Administrator shall take into account the nature of
services rendered and to be rendered by the respective recipients, their
present and potential contribution to the Company’s success and such other
factors as the Administrator in its discretion deems relevant to the
accomplishment of the purposes of the Plan. 
In any year, the Administrator may approve Restricted Stock Grants to
Eligible Employees subject to differing terms and conditions.

 

                                     6.             RIGHTS WITH RESPECT TO SHARES OF
STOCK.  The Administrator or its
designee shall notify each Eligible Employee to whom a Restricted Stock Grant
has been granted of such grant.  Upon
written acceptance by the Eligible Employee of restrictions and other terms and
conditions described in the Plan and in the instrument evidencing such
Restricted Stock Grant, the Eligible Employee shall be a Participant, and the
Company shall cause to be issued or transferred to the name of the Participant
a certificate or certificates for the number of shares of Stock granted,
subject to the provisions of Section 8.5 hereof.  From and after the Issue Date, the Participant shall have
absolute ownership of such shares of Stock, including the right to vote and to
receive dividends thereon, subject to the terms, conditions and restrictions
described in the Plan and in the instrument evidencing the grant of such
Restricted Stock Grant.

 

                                     7.             EMPLOYMENT.  No grant of a Restricted Stock Grant to a
Participant under the Plan shall affect any right of the Company or any
Subsidiary to terminate, with or without cause, the Participant’s employment at
any time.

 

                                     8.             TERMS AND CONDITIONS OF
RESTRICTED STOCK GRANT.  Each
Restricted Stock Grant made under the Plan shall contain the following terms,
conditions and restrictions and such additional terms, conditions and
restrictions as may be determined by the Administrator at the time of grant.

 

                                                     8.1.             Termination of Continuous
Employment.  If the Participant’s
Continuous Employment with the Company or any Subsidiary shall terminate for
any reason, except as provided in Section 8.3, all the rights of the
Participant to such shares of Stock as to which restrictions have not lapsed
pursuant to 

 

 

this Section or
under Sections 8.2 or 8.3 hereof shall immediately terminate; except as
provided otherwise by the Administrator.

 

                                                     8.2.             Lapse of Restrictions.  The restrictions imposed on any Restricted
Stock Grant shall lapse as to twenty-five percent (25%) of the Stock granted
pursuant to such grant on each of first through fourth Vesting Dates which
occur following the related Grant Date of such Restricted Stock Grant.  Notwithstanding the foregoing, the
Administrator may accelerate the lapsing of restrictions on a Restricted Stock
Grant, in whole or in part, or provide for an alternative vesting schedule
(i) as permitted by Section 8.1; (ii) as required by any employment or
other agreement with the Company or any Subsidiary to which a Participant
hereunder is a party; or (iii) under such terms and conditions as the
Administrator deems appropriate.

 

                                                     8.3.             Termination of Continuous
Employment by Reason of Death or Disability.  Except as provided otherwise by the Administrator, if a
Participant (i) has been in the Continuous Employment of the Company or a
Subsidiary since the Grant Date of a Restricted Stock Grant and (ii) the
employment of such Participant is terminated as a result of death or
Disability, then, on the date of such termination, the restrictions imposed on
any Restricted Stock Grant shall lapse as to all shares of Stock granted to
such Participant pursuant to such Restricted Stock Grant, notwithstanding any
provisions of Section 8.1 to the contrary.

 

                                                     8.4.             Agreement by Participant
Regarding Withholding Taxes.  Each
Participant granted a Restricted Stock Grant shall represent in writing that
such Participant acknowledges that, with respect to each Restricted Stock Grant
held by such Participant, (i) on each Vesting Date, Withholding Taxes
become due with respect to shares of Stock as to which restrictions lapse,
(ii) payment of Withholding Taxes to the Company is the responsibility of
Participant and (iii) payment of such Withholding Taxes may require a
significant cash outlay by Participant. 
In addition, each Participant granted a Restricted Stock Grant shall be
subject to the following rules:

 

                                                                        8.4.1.  Payment of Taxes.  Within five (5) business days following any
lapsing of restrictions pursuant to the operation of Sections 8.1, 8.2 or 8.3
hereof, the Company shall notify each affected Participant or, if applicable
under Section 8.3, his or her estate, as to the amount of Withholding Taxes
required to be withheld by the Company as a result of the lapse of
restrictions.  Within five (5) business
days of receipt of such notice, Participant shall make full payment of
Withholding Taxes to the Company.  Such
payment may be made in cash or by check or by reduction in the number of shares
deliverable to Participant. Notwithstanding the foregoing, in the event a
Restricted Stock Grant vests by reason of the death of Participant, Withholding
Taxes shall be paid by reduction in the number of shares deliverable to
Participant unless Participant’s estate elects otherwise no later than the day
after vesting.  If Withholding Taxes are
paid by reduction of the number of shares deliverable to Participant, such
shares shall be valued as of either the date the restrictions lapsed or as of
the tenth business day following the lapsing of restrictions, as may be determined
by the Administrator at the time of grant. 
In the event that such payment is not made within the 

 

 

specified time
period, to the extent permitted by law the Company shall have the right to
cause such Participant’s Withholding Taxes obligation to be satisfied by
reducing the number of shares of Stock deliverable or by offsetting such
Withholding Taxes against amounts otherwise due from the Company to such
Participant.  The Company may instruct
its transfer agent to withhold delivery of certificates evidencing such shares
of Stock until Participant’s Withholding Taxes obligation has been satisfied in
full.

 

                                                                        8.4.2.  Election to Recognize Gross Income in the
Year of Grant.  If any Participant
properly elects within thirty (30) days of the Grant Date, to include in gross
income for federal income tax purposes an amount equal to the fair market value
of the shares of Stock on the Grant Date, such Participant shall pay to the
Company in the calendar month of such Grant Date, or make arrangements satisfactory
to the Administrator to pay to the Company, any Withholding Taxes required to
be withheld with respect to such shares.

 

                                                     8.5.             Restrictive Legends; Transfer
Restrictions; Custody.  Each
certificate evidencing shares of Stock granted pursuant to a Restricted Stock
Grant may bear an appropriate legend referring to the terms, conditions and
restrictions described in the Plan and in the instrument evidencing the
Restricted Stock Grant and any other legend deemed advisable by the Company for
purposes of compliance with federal or state securities laws.  In addition, if required under this Plan or
applicable securities laws, the Company may instruct its transfer agent that
shares of Stock evidenced by such certificates may not be transferred without
the written consent of the Company.  Any
attempt to dispose of such shares of Stock in contravention of such terms,
conditions and restrictions shall be invalid. 
Until the restrictions thereon have lapsed, the related Withholding
Taxes obligations have been satisfied and the six month period described in
Section 8.10 has expired, such certificates will be held in custody by the
Company or such bank or other institution designated by the Administrator.

 

                                                     8.6.             No Assignment.  Except as specifically provided by law (including
the laws of descent and distribution), no right or benefit under, or interest
in, the Plan shall be subject to assignment, and no such right, benefit or
interest shall be subject to attachment or legal process for or against
Participant or his or her beneficiaries, as the case may be.

 

                                                     8.7.             Compliance with Securities Laws.  Stock shall not be issued pursuant to a
Restricted Stock Grant unless the issuance and delivery of Stock pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act, the Exchange Act, applicable state securities
laws, and rules and regulations promulgated under each of the foregoing, and
the requirements of any stock exchange upon which the Stock may then be listed
or quotation system upon which the Stock may be quoted, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

                                                     8.8.             Registration and Resale.  If the Stock subject to this Plan is not
registered under the Securities Act and under applicable state securities laws,

 

 

the Administrator
may require that the Participant deliver to the Company such documents as
counsel for the Company may determine are necessary or advisable in order to
substantiate compliance with applicable securities laws and the rules and
regulations promulgated thereunder.

 

                                                     8.9.             Holding Period.  Except as provided in Section 8.3 hereof, a
Restricted Stock Grant made under this Plan shall provide that the Participant
shall not dispose of Stock subject to such Restricted Stock Grant for at least
six months after the Grant Date or for any longer period required pursuant to
Sections 8.7 or 8.8.

 

                                                     8.10.           Automatic Forfeiture.  Notwithstanding anything else herein to the
contrary, a Restricted Stock Grant shall be automatically forfeited, title to
such shares shall be reconveyed to the Company without consideration, and such
shares shall resume the status of shares authorized for grant under this Plan,
if, within six months after the Grant Date, the recipient of such Restricted
Stock Grant becomes subject to Section 16 of the Exchange Act with respect to
transactions in the Company’s securities.

 

                                                     8.11.           Cash in Lieu of Stock.   In its discretion, the Administrator may
offer to any Participant the choice of surrendering all or a portion of a
Restricted Stock Grant on or prior to its Vesting Dates and instead receiving
such cash payments as the Administrator may determine.  The choice of Participants, Restricted Stock
Grants and the amount and timing of cash payments, including any vesting
provisions related thereto, shall be at the discretion of the Administrator,
which may elect to make different offers on different terms with respect to
different Restricted Stock Grants and different Participants.  No participant shall have any right to
receive such an offer.  No such offer,
or acceptance thereof by any Participant, shall affect any right of the Company
or any Subsidiary to terminate, with or without cause, the Participant’s
employment at any time.

 

                                     9.             ADJUSTMENTS UPON CHANGES IN
CAPITALIZATION.  If the Stock is
changed by reason of a stock split, reverse stock split, stock dividend, or
recapitalization, or is converted into or exchanged for other securities,
appropriate adjustments shall be made in the number and class of shares of
Stock subject to this Plan and each Restricted Stock Grant made pursuant to
this Plan; provided, however, that if fractional shares become due to any
Participant as a result of any such adjustment, the Company may, at its option,
pay cash in lieu thereof.  Each such
adjustment shall be determined by the Administrator in its sole discretion,
which determination shall be final and binding on all persons.  Any new or additional Stock to which a
Participant may be entitled under this Section 9 shall be subject to all the
terms and conditions set forth in Section 8 of this Plan.

 

                                     10.           DURATION OF PLAN. The Plan
shall remain in effect until terminated by the Board or the Administrator.  Termination of the Plan shall not affect any
Restricted Stock Grants previously granted pursuant thereto, which shall remain
in effect until their restrictions shall have lapsed, all in accordance with
their terms.

 

 

                                     11.           AMENDMENT, SUSPENSION OR
TERMINATION OF THE PLAN.  The
Administrator may at any time amend, alter, suspend, or discontinue this Plan;
provided, however, no amendment, alteration, suspension or discontinuation
shall be made that would impair the rights of any Participant under a
Restricted Stock Grant without such Participant’s consent.  Subject to the foregoing, the Administrator
shall have the power to make such changes in the regulations and administrative
provisions hereunder, or in any Restricted Stock Grant, as in the opinion of
the Administrator may be appropriate from time to time.

 

                                     12.           INDEMNIFICATION OF ADMINISTRATOR.  Members of the group constituting the
Administrator, and any person acting pursuant to a delegation of authority
therefrom, shall be indemnified for actions with respect to the Plan to the
fullest extent permitted by the Certificate of Incorporation, as amended, and
the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company
and any such person.

 

                                     13.           HEADINGS.  The headings used in this Plan are for
convenience only, and shall not be used to construe the terms and conditions of
the Plan.

 

                                     14.           FOREIGN EMPLOYEES.  Without amending the Plan, the Administrator
may make Restricted Stock Grants to eligible employees who are foreign
nationals on such terms and conditions different from those specified in this
Plan as may in the judgment of the Administrator be necessary or desirable to
foster and promote achievement of the purposes of the Plan, and, in furtherance
of such purposes the Administrator may make such modifications, amendments,
procedures, subplans and the like as may be necessary or advisable to comply
with provisions of laws in other countries in which the Company operates or has
employees.Exhibit
10.22

 

ROBERT HALF INTERNATIONAL INC.

 

Stock Option Plan for Field Employees

 

(As Amended and Restated
Effective July 24, 2002)

 

                1.             Purposes.  The principal purposes of the Robert Half
International Inc. Stock Option Plan for Field Employees (the “Plan”) are:  (a) to improve individual employee
performance by providing long-term incentives and rewards to employees of the
Company, (b) to assist the Company in attracting, retaining and motivating
employees with experience and ability, and (c) to associate the interests of
such employees with those of RHII’s stockholders.

 

                2.             Definitions.  Unless the context clearly indicates
otherwise, the following terms, when used in this Plan, shall have the meanings
set forth below:

 

                (a) “Common Stock”
or “Stock” means RHII Common Stock, par value $.001 per share.

 

                (b)
“Administrator” means the Board of Directors of RHII or a committee of one or
more directors appointed by the Board.

 

                (c) “Company”
means Robert Half International Inc., its divisions and direct and indirect
subsidiaries.

 

                (d) “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

                (e) “Fair Market
Value” means the closing sales price on the New York Stock Exchange or the
NASDAQ National Market System, as the case may be, on the date the value is to
be determined as reported in The Wall Street Journal (Western
Edition).  If there are no trades on
such date, the closing price on the latest preceding business day upon which
trades occurred shall be the Fair Market Value.  If the Stock is not listed in the New York Stock Exchange or
quoted on the NASDAQ National Market System, the Fair Market Value shall be
determined in good faith by the Administrator.

 

                (f) “Grant Date”
means the effective date on which an Option is granted under the Plan.

 

                (g) “Option” or
“Stock Option” means a right granted under the Plan to an Optionee to purchase
shares of Common Stock at a fixed price for a specified period of time.

 

                (h) “Option Price”
means the price at which a share of Common Stock covered by an Option granted
hereunder may be purchased.

 

 

                (i) “Optionee”
means an eligible employee of or consultant to the Company who has received a
Stock Option granted under the Plan.

 

                (j) “RHII” means
Robert Half International Inc., a Delaware corporation.

 

                2.             Administration.  The Plan shall be administered by the
Administrator, which shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations, agreements, guidelines
and instruments for the administration of the Plan as the Administrator deems
necessary or advisable.  The
Administrator’s powers include, but are not limited to (subject to the specific
limitations described herein), authority to determine the employees to be
granted Options under the Plan, determine the size and applicable terms and
conditions of grants to be made to such employees, determine the time when
Options will be granted and authorize grants to eligible employees.  Any guidelines that may be adopted from time
to time by the Administrator shall be advisory only and shall not be binding
upon the Administrator.

 

                The
Administrator’s interpretations of the Plan, and all actions taken and
determinations made by the Administrator concerning any matter arising under or
with respect to the Plan or any Options granted hereunder, shall be final,
binding and conclusive on all interested parties.  To the extent permitted by applicable law, the Administrator may
delegate authority to one or more individuals or subcommittees, such delegation
to be subject to such terms and conditions as the Administrator in its
discretion shall determine.  The
Administrator may as to all questions of accounting rely conclusively upon any
determinations made by the independent public accountants of the Company.

 

                3.             Stock Available for Options.  The shares that may be delivered or
purchased under the Plan shall not exceed an aggregate of 22,140,000 shares of
Common Stock, subject to any adjustments which may be made pursuant to Section
10 hereof.  Shares of Stock used for
purposes of the Plan may be either shares of authorized but unissued Common
Stock or treasury shares or both.  Stock
covered by Options which have terminated or expired prior to exercise or have
been surrendered or cancelled shall be available for further option hereunder.

 

                4.             Eligibility.  All those employees of or consultants to the
Company as shall be determined from time to time by the Administrator shall be
eligible to participate in the Plan, provided, however, that no individual who
is subject to Section 16 of the Exchange Act with respect to transactions in
the Company’s securities may be granted an option.

 

                5.             Terms and Conditions of Options.  Each Option granted hereunder shall be in
writing and shall contain such terms and conditions as the Administrator may
determine, subject to the following:

 

                (a) Price.  The Option Price shall be not less than 85%
of the Fair Market Value of Common Stock on the Grant Date.

 

 

                (b) Term and
Exercise Dates.  Options granted
hereunder shall have a term of no longer than ten years from the Grant Date. A
grant of Options may vest and become exercisable in installments; provided,
however, that no Option shall become exercisable until six months following the
Grant Date of such Option.  However,
Stock Options must be exercised for full shares of Common Stock.  To the extent that Stock Options are not
exercised when they become initially exercisable, they shall be carried forward
and be exercisable until the expiration of the term of such Stock Options,
subject to the provisions of Section 5(e) and 9 hereof.  An option granted to an eligible employee
pursuant to this Plan shall automatically expire if, within six months after
its grant, the recipient of such option becomes subject to Section 16 of the
Exchange Act with respect to transactions in the Company’s securities.

 

                (c) Exercise of
Option.  To exercise an Option, the
holder thereof shall give notice of his or her exercise to the Company,
specifying the number of shares of Common Stock to be purchased and identifying
the specific Options that are being exercised. 
From time to time the Administrator may establish procedures relating to
effecting such exercises.  No fractional
shares shall be issued as a result of exercising an Option.  An Option is exercisable during an
Optionee’s lifetime only by the Optionee or Optionee’s guardian or legal
representative.

 

                (d) Payment of
Option Price.  The purchase price
for Options being exercised must be paid in full at time of exercise.  Payment shall be by cash or check. In
addition, in order to enable the Company to meet any applicable foreign,
federal (including FICA), state and local withholding tax requirements, an
Optionee shall also be required to pay the amount of tax to be withheld.  No share of stock will be delivered to any
Optionee until all such amounts have been paid.  In the event that withholding taxes are not paid within the
specified time period, to the extent permitted by law the Company shall have
the right, but not the obligation, to cause such withholding taxes to be
satisfied by reducing the number of shares of stock deliverable or by
offsetting such withholding taxes against amounts otherwise due from the
Company to the Optionee.  If withholding
taxes are paid by reduction of the number of shares deliverable to Optionee,
such shares shall be valued at the Fair Market Value as of the date of
exercise.

 

                (e) Effect of
Termination of Employment or Service. 
(1)  All Options then held by the
Optionee which are exercisable at the date of termination of employment or
service shall continue to be exercisable by the Optionee, or, if applicable,
Optionee’s estate, until the earlier of 30 days after such date or the
expiration of such Options in accordance with their terms, unless the
Administrator shall determine otherwise. 
All Options which are not exercisable at the date of termination of
employment or service shall automatically terminate and lapse, unless the
Administrator shall determine otherwise. 
Notwithstanding the foregoing, if exercise of an Option during the
30-day period described in the first sentence would subject the Optionee to
liability under Section 16 of the Exchange Act, such Option shall be
exercisable until the earliest of (a) its normal termination date and (b) seven
months after the last transaction in Common Stock by the Optionee prior to
termination.

 

                (2)  Notwithstanding anything in Section 5(e)(1)
hereof to the contrary, if an Optionee’s employment shall terminate by reason
of Retirement (as defined herein), then any New Option held by such Optionee
outstanding on the date of termination of employment shall remain outstanding
until the earliest of (a) its exercise, (b) its original option term, (c) its
forfeiture pursuant to Section 5(f) hereof, or (d) its buy out pursuant to
Section 9 hereof, unless otherwise determined by the Administrator at the time
of grant.  Any vesting or other passage
of time requirements relating to exercisability of the New Option shall remain
in effect, unless otherwise determined by the Administrator at the time of
grant.  As used herein, Retirement shall
mean any voluntary termination by Optionee of employment with Company on or
after the later to occur of (a) Optionee’s 55th birthday, or (b) the
20th anniversary of Optionee’s first day of service with the Company as a
full-time employee.  As used herein, New
Option shall refer to any Option granted on or after May 3, 2001.

 

                (f) Misconduct.  In the event that the Administrator
determines in good faith that an Optionee has (i) used for profit, or
materially harmed the Company by disclosing to unauthorized persons,
confidential information or trade secrets of the Company, (ii) materially
breached any contract with, or materially violated any fiduciary obligation to,
the Company, or (iii) engaged in unlawful trading in the securities of RHII or
of another company based on nonpublic information gained as a result of that
Optionee’s employment with the Company, then, effective as of the date notice
of such misconduct is given by the Administrator to the Optionee, that Optionee
shall forfeit all rights to any unexercised Options granted under the Plan and
all of that Optionee’s outstanding Options shall automatically terminate and
lapse, unless the Administrator shall determine otherwise.

 

                (g) Nontransferability
of Options.  During an Optionee’s
lifetime, his or her Options shall not be transferrable and shall only be
exercisable by the Optionee and any purported transfer shall be null and
void.  Options are not transferable
except by will or by the laws of descent and distribution.

 

                6.             Amendment.  The Administrator may, at any time, amend,
suspend or terminate the Plan, in whole or in part, provided that no such
action shall adversely affect any rights or obligations with respect to any
grants theretofore made hereunder.  The
Administrator may amend the terms and conditions of outstanding Options,
provided, however, that (i) no such amendment shall be adverse to the holders
of the Options, (ii) no such amendment shall extend the term of an Option, and
(iii) the amended terms of the Option would be permitted under this Plan.

 

                7.             Foreign Employees.  Without amending the Plan, the Administrator
may grant Options to eligible employees or consultants who are foreign
nationals on such terms and conditions different from those specified in this
Plan as may in the judgment of the Administrator be necessary or desirable to
foster and promote achievement of the purposes of the Plan, and, in furtherance
of such purposes the Administrator may make such modifications, amendments,
procedures, subplans and the like as may be necessary 

 

 

or advisable to comply with provisions of laws in other countries in
which the Company operates or has employees.

 

                8.             Registration, Listing and
Qualification of Shares.  Each
Option shall be subject to the requirement that if at any time the
Administrator shall determine that the registration, listing or qualification
of the shares covered thereby upon any securities exchange or under any
foreign, federal, state or local law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or
in connection with, the granting of such Option or the purchase of shares
thereunder, no such Option may be exercised unless and until such registration,
listing, qualification, consent or approval shall have been effected or
obtained free of any condition not acceptable to the Administrator.  Any person exercising an Option shall make
such representations and agreements and furnish such information as the
Administrator may request to assure compliance with the foregoing or any other
applicable legal requirements.  RHII
shall use its reasonable best efforts to cause shares issued hereunder to be
registered under the Securities Act of 1933, as amended.

 

                9.             Buy Out of Option Gains.  The Administrator shall have the right to
elect, in its sole discretion and without the consent of the holder thereof
(subject to the last sentence of this paragraph), to cancel the exercisable
portion of any Option and pay to the Optionee the excess of the Fair Market
Value of the shares of Common Stock covered by such cancelled portion of the
Option over the Option Price of such cancelled portion of the Option at the
date the Administrator provides written notice (the “Buy Out Notice”) of its
intention to exercise such right.  Buy
outs pursuant to this provision shall be effected by RHII as promptly as
possible after the date of the Buy Out Notice. 
Payments of buy out amounts may be made in cash, in shares of Common
Stock, or partly in cash and partly in Common Stock, as the Administrator deems
advisable.  To the extent payment is
made in shares of Common Stock, the number of shares shall be determined by
dividing the amount of the payment to be made by the Fair Market Value of a
share of Common Stock at the date of the Buy Out Notice.  In no event shall RHII be required to
deliver a fractional share of Common Stock in satisfaction of this buy out
provision.  Payments of such buy out
amounts shall be made net of any applicable foreign, federal (including FICA),
state and local withholding taxes. 
Notwithstanding the foregoing, no buy out may be effected (a) until at
least six months after the Grant Date of the subject option, and (b) without
the consent of the Optionee if the Optionee is generally required to file
reports pursuant to Section 16(a) of the Exchange Act with respect to his
transactions in the Common Stock.

 

                10.           Adjustment for Change in Stock
Subject to Plan.  In the event of
any change in the outstanding shares of Common Stock by reason of any stock
split, stock dividend, recapitalization, merger, consolidation, combination or
exchange of shares or other similar corporate change, such equitable
adjustments may be made in the Plan and the Options granted hereunder as the
Administrator determines are necessary or appropriate, including, if necessary,
an adjustment in the number of shares and prices per share applicable to
Options then outstanding and in the number of shares which are 

 

 

reserved for issuance under the Plan. 
Any such adjustment shall be conclusive and binding for all purposes of
the Plan.

 

                11.           No Rights to Options or Employment.  No employee or other person shall have any
claim or right to be granted an Option under the Plan.  Receipt of an Option under the Plan shall
not give an Optionee any rights to receive any other grant under the Plan.  An Optionee shall have no rights to or
interest in any Option except as set forth herein.  Neither the Plan nor any action taken hereunder shall be
construed as giving any Optionee any right to be retained in the employ or
service of the Company.

 

                12.           Rights as Shareholder.  An Optionee under the Plan shall have no
rights as a holder of Common Stock with respect to Options granted hereunder,
unless and until certificates for shares of Common Stock are issued to such
Optionee.

 

                13.           Other Actions.  This Plan shall not restrict the authority
of the Administrator or of RHII, for proper corporate purposes, to grant or
assume stock options, other than under the Plan, to or with respect to any
employee or other person.

 

                14.           Costs and Expenses.  Except as provided in Section 5(d) hereof
with respect to taxes, the costs and expenses of administering the Plan shall
be borne by RHII and shall not be charged to any grant nor to any employee
receiving a grant.

 

                15.           Plan Unfunded.  The Plan shall be unfunded.  Except for reserving a sufficient number of
authorized shares to the extent required by law to meet the requirements of the
Plan, RHII shall not be required to establish any special or separate fund or
to make any other segregation of assets to assure the payment of any grant
under the Plan.

 

                16.           Governing Law.  This Plan shall be governed by and construed
in accordance with the laws of the State of Delaware.

 

                17.           Indemnification of Administrator.  Members of the group constituting the
Administrator, and any person acting pursuant to a delegation of authority
therefrom, shall be indemnified for actions with respect to the Plan to the
fullest extent permitted by the Certificate of Incorporation, as amended, and
the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company
and any such persons.

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