<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 1999
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ADMINISTAFF, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0479645
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19001 CRESCENT SPRINGS DRIVE
KINGWOOD, TEXAS 77339-3802
(Address, including zip code, of Principal Executive Offices)
ADMINISTAFF, INC. 1997 INCENTIVE PLAN
ADMINISTAFF, INC. NONQUALIFIED STOCK OPTION PLAN
(Full title of the plan)
JOHN H. SPURGIN, II
ADMINISTAFF, INC.
19001 CRESCENT SPRINGS DRIVE
KINGWOOD, TEXAS 77339-3802
(281) 358-8986
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copy to:
G. MICHAEL O'LEARY
ANDREWS & KURTH L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4200
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
PROPOSED
MAXIMUM
AMOUNT PROPOSED AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 1,200,000 $15.09 $18,108,000 $ 5,034.02
======================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h), based upon the average of the high and low prices
per share for August 11, 1999 on the New York Stock Exchange as reported in
The Wall Street Journal on August 12, 1999.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
will be sent or given to participants as specified by Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act"). Such documents need
not be filed with the Securities and Exchange Commission (the "Commission")
either as a part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents and the documents incorporated
herein by reference pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act (the "Prospectus").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Administaff, Inc. (the "Company") hereby incorporates by reference the
following documents listed below. In addition, all documents subsequently filed
by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") (prior to the filing of a
post-effective amendment which indicates that all the securities offered have
been sold or which deregisters all securities then remaining unsold) shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part thereof from the date of filing of such documents.
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998.
(b) The Company's Quarterly Report on Form 10-Q for the Quarter
ended March 31, 1999.
(c) The description of the Company's common stock, par value $0.01
per share, contained in the Company's Registration Statement
on Form 8-A (No. 13998) filed with the Commission on October
6, 1995 pursuant to Section 12 of the Exchange Act.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
subsequent to the date of this Registration Statement and prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all such securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents. Any statement contained herein or in
a document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of the Registration
Statement and the Prospectus to the extent that a statement contained herein or
in any subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or the
Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is registered
under Section 12 of the Exchange Act.
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The information required by Item 5 is not applicable to this
Registration Statement.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Eleventh of the Company's Certificate of Incorporation states
that:
<PAGE> 4
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article
Eleventh shall not eliminate or limit the liability of a director to the extent
provided by applicable law (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the General Corporation Law of the State of Delaware
or (iv) for any transaction from which the director derived an improper personal
benefit. No amendment to or repeal of this Article Eleventh shall apply to, or
have any effect on, the liability or alleged liability of any director of the
Corporation for or with respect to any facts or omissions of such director
occurring prior to such amendment or repeal. If the General Corporation Law of
the State of Delaware is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, as so
amended.
In addition, Article VI of the Company's Bylaws further provides that
the Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement because the class of securities to be offered is
registered under Section 12 of the Exchange Act.
ITEM 8. EXHIBITS.
Exhibit
Number Description
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included in signature page)
99.1 Administaff, Inc. 1997 Incentive Plan
99.2 First Amendment to the Administaff, Inc. 1997 Incentive Plan
99.3 Second Amendment to the Administaff, Inc. 1997 Incentive Plan
99.4 Third Amendment to the Administaff, Inc. 1997 Incentive Plan
99.5 Fourth Amendment to the Administaff, Inc. 1997 Incentive Plan
99.6 Administaff, Inc. Nonqualified Stock Option Plan
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
<PAGE> 5
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Company pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE> 6
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 13th day of
August, 1999.
ADMINISTAFF, INC.
By: /s/ RICHARD G. RAWSON
-------------------------------------------
Richard G. Rawson
Executive Vice President of Administration,
Chief Financial Officer and Treasurer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Administaff, Inc. (the "Company"), hereby constitutes and
appoints Paul J. Sarvadi and Richard G. Rawson, or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute and file this
Registration Statement under the Securities Act of 1933, as amended, and any or
all amendments (including, without limitation, post-effective amendments), with
all exhibits and any and all documents required to be filed with respect
thereto, with the Securities and Exchange Commission or any regulatory
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do, if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 13th day of August, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ PAUL J. SARVADI
- ------------------------------ President, Chief Executive Officer and
Paul J. Sarvadi Director (Principal Executive Officer)
/s/ RICHARD G. RAWSON
- ------------------------------ Executive Vice President of Administration,
Richard G. Rawson Chief Financial Officer, Treasurer and Director
(Principal Financial Officer)
/s/ SAMUEL G. LARSON
- ------------------------------ Vice President of Finance and Controller
Samuel G. Larson (Principal Accounting Officer)
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
- ----------------------------- Director
Jack M. Fields, Jr.
/s/ PAUL S. LATTANZIO
- ----------------------------- Director
Paul S. Lattanzio
/s/ LINDA FAYNE LEVINSON
- ----------------------------- Director
Linda Fayne Levinson
/s/ STEVE ALESIO
- ----------------------------- Director
Steve Alesio
- ----------------------------- Director
Michael W. Brown
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included in signature page)
99.1 Administaff, Inc. 1997 Incentive Plan
99.2 First Amendment to the Administaff, Inc. 1997 Incentive Plan
99.3 Second Amendment to the Administaff, Inc. 1997 Incentive Plan
99.4 Third Amendment to the Administaff, Inc. 1997 Incentive Plan
99.5 Fourth Amendment to the Administaff, Inc. 1997 Incentive Plan
99.6 Administaff, Inc. Nonqualified Stock Option Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
August 13, 1999
Board of Directors
Administaff, Inc.
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
Ladies and Gentlemen:
We have acted as counsel to Administaff, Inc. (the "Company") in
connection with the Company's Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of the issuance of up to 1,200,000 shares (the "Shares") of
the Company's common stock, par value $.01 per share, pursuant to the
Administaff, Inc. 1997 Incentive Plan and the Administaff, Inc. Nonqualified
Stock Option Plan (the "Plans").
In connection herewith, we have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as we have deemed necessary as a basis for the opinion hereafter expressed. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. We have
also relied, to the extent we deem such reliance proper, upon information
supplied by officers and employees of the Company with respect to various
factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized and reserved for issuance and, when issued in accordance
with the terms of the Plans, will be validly issued, fully-paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Administaff, Inc. 1997 Incentive Plan of
our report dated February 12, 1999, with respect to the consolidated financial
statements of Administaff, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
Houston, Texas
August 13, 1999
<PAGE> 1
EXHIBIT 99.1
ADMINISTAFF, INC.
1997 INCENTIVE PLAN
Administaff, Inc., a Delaware corporation (the "Company"), hereby
amends and restates the 1995 Administaff Stock Option Plan and renames said plan
the Administaff, Inc. 1997 Incentive Plan (the "Plan"), effective as of May 28,
1997. The terms and provisions of the Plan are set forth below.
1. Purpose. The purpose of the Plan is to promote the interests of the
Company by encouraging employees of the Company and its Subsidiaries and the
nonemployee directors of the Company to acquire or increase their equity
interests in the Company and to provide a means whereby such persons may develop
a sense of proprietorship and personal involvement in the development and
financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated to
enhance the ability of the Company and its Subsidiaries to attract and retain
the services of individuals who are believed to be essential for the growth and
profitability of the Company.
2. Definitions. As used in this Plan:
(a) "Award" means an Option Right, a Director Option, Phantom
Shares, a Performance Unit, Bonus Stock, or Other Stock-Based Award.
(b) "Board" means the Board of Directors of the Company.
(c) "Bonus Stock" means unrestricted shares of Common Stock
granted pursuant to Paragraph 9.
(d) "Change in Control" shall be deemed to have occurred upon:
(i) the date of the acquisition by any "person"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 ("Exchange Act")), excluding
the Company or any of its Subsidiaries or affiliates, and the
group that may be deemed to exist solely by reason of that
certain Voting Agreement, dated as of May 13, 1994 among Paul
J. Sarvadi, Gerald M. McIntosh, James W. Hammond, Scott C.
Hensel, Richard G. Rawson, William E. Lange, Pyramid Ventures,
Inc., Texas Growth Fund--1991 Trust, the McIntosh Charitable
Remainder Unit Trust, the Hammond Family Foundation, the Gary
and Nancy Reed Foundation and the Sarvadi Family Foundation,
of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of 30% or more of either the then
outstanding shares of common stock of the Company, or the then
outstanding voting securities entitled to vote generally in
the election of directors; or
(ii) the date the individuals who constitute the
Board as of May 28, 1997 (the "Incumbent Board"), cease for
any reason to constitute at least a majority of the members of
the Board, provided that any person becoming a director
subsequent to May 28, 1997 whose election, or nomination for
election by the Company's stockholders, was approved by a vote
of at least a majority of the directors then comprising the
Incumbent Board (other than any individual whose nomination
for election to Board membership was not endorsed by the
Company's management prior to, or at the time of, such
individual's initial nomination for election) shall be, for
purposes of this Plan, considered as though such person were a
member of the Incumbent Board;
<PAGE> 2
(iii) the date of consummation of a merger,
consolidation, recapitalization, reorganization, sale or
disposition of all or a substantial portion of the Company's
assets, or the issuance of shares of stock of the Company in
connection with the acquisition of the stock or assets of
another entity, provided, however, that a Change in Control
shall not occur under this clause (iii) if consummation of the
transaction would result in at least 50% of the total voting
power represented by the voting securities of the Company (or,
if not the Company, the entity that succeeds to all or
substantially all of the Company's business) outstanding
immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 50% of the holders of outstanding
voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing
holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the date the Company files a report or proxy
statement with the Securities and Exchange Commission pursuant
to the Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or
may have occurred or will or may occur in the future pursuant
to any then-existing contract or transaction.
(e) "Code" means the Internal Revenue Code of 1986, as in
effect from time to time.
(f) "Committee" means the Compensation Committee of the Board.
(g) "Common Stock" means the Common Stock, $0.01 par value, of
the Company or any security into which such Common Stock may be changed
by reason of any transaction or event of the type described in
Paragraph 12.
(h) "Date of Grant" means (i) with respect to an Award, other
than a Director Option, the date specified by the Committee on which
such Award will become effective (which date will not be earlier than
the date on which the Committee takes action with respect thereto) and
(ii) with respect to a Director Option, the automatic date of grant as
provided in Paragraph 9.
(i) "Director" means a director of the Company who is not also
an employee of the Company or a Subsidiary, but excluding any director
who is also an employee, director, officer, partner, principal, or
affiliate of Texas Growth Fund--1991 Trust, Pyramid Ventures, Inc. or
any of their respective controlling persons.
(j) "Director Option" means the right to purchase a share of
Common Stock upon exercise of an option granted pursuant to Paragraph
9.
(k) "Employee" means an employee of the Company or Subsidiary,
and any person who has been offered employment by the Company or a
Subsidiary, provided that any Award granted to such prospective
employee shall be canceled if such person fails to commence such
employment, and no payment of value may be made in connection with such
Award until such person has commenced such employment; and provided,
further, such person may not be granted an incentive stock option prior
to the date the person actually commences employment.
(l) "Market Value per Share" means, at any date, the closing
sale price per share of the Common Stock on that date (or, if there are
no sales on that date, the last preceding date on which there was a
sale) in the principal market in which the Common Stock is traded.
(m) "Option Price" means the purchase price per share payable
on exercise of an Option Right or Director Option.
<PAGE> 3
(n) "Option Right" means the right to purchase a share of
Common Stock upon exercise of an option granted pursuant to Paragraph
4.
(o) "Other Stock-Based Award" means an Award as described in
Paragraph 8.
(p) "Participant" means an Employee who is selected by the
Committee to receive an Award under any of Paragraphs 4 through 8 and
shall also include a Director who has received an automatic grant of
Director Options pursuant to Paragraph 9.
(q) "Performance Objectives" means the objectives, if any,
established by the Committee that are to be achieved with respect to an
Award granted under this Plan, which may be described in terms of
Company-wide objectives, in terms of objectives that are related to
performance of a division, Subsidiary, department, geographic market or
function within the Company or a Subsidiary in which the Participant
receiving the Award is employed or in individual or other terms, and
which will relate to the period of time (Performance Cycle) determined
by the Committee. The Performance Objectives intended to qualify under
Section 162(m) of the Code shall be with respect to one or more of the
following (i) net earnings; (ii) operating income; (iii) earnings
before interest and taxes ("EBIT"); (iv) earnings before interest,
taxes, depreciation, and amortization expenses ("EBITDA"); (v) earnings
before taxes and unusual or nonrecurring items; (vi) total revenue;
(vii) return on investment; (viii) return on equity; (ix) return on
total capital; (x) return on assets; (xi) total stockholder return;
(xii) return on capital employed in the business; (xiii) stock price
performance; (xiv) earnings per share growth; (xv) cash flows; (xvi)
total profit; (xvii) operating expenses; (xviii) fee revenue; (xix)
total revenue less bonus payroll; (xx) the number of paid work-site
employees; and (xxi) gross mark-up per employee. Which objectives to
use with respect to an Award, the weighting of the objectives if more
than one is used, and whether the objective is to be measured against a
Company- established budget or target, an index or a peer group of
companies, shall be determined by the Committee in its discretion at
the time of grant of the Award. A Performance Objective need not be
based on an increase or a positive result and may include, for example,
maintaining the status quo or limiting economic losses. The Committee,
in its sole discretion and without the consent of the Participant, may
amend (i) any stock-based Award to reflect (1) a change in corporate
capitalization, such as a stock split or dividend, (2) a corporate
transaction, such as a corporate merger, a corporate consolidation, any
corporate separation (including a spinoff or other distribution of
stock or property by a corporation), any corporate reorganization
(whether or not such reorganization comes within the definition of such
term in Section 368 of the Code), (3) any partial or complete corporate
liquidation, or (4) a change in accounting rules required by the
Financial Accounting Standards Board and (ii) any Award that is not
intended to meet the requirements of Section 162(m) of the Code, to
reflect a significant event that the Committee, in its sole discretion,
believes to be appropriate to reflect the original intent in the grant
of the Award.
(r) "Performance Unit" means a unit equivalent to $100 (or
such other value as the Committee determines) awarded pursuant to
Paragraph 6.
(s) "Phantom Shares" means notional shares of Common Stock
awarded pursuant to Paragraph 5 or 8.
(t) "Rule 16b-3" means Rule 16b-3 of the Securities and
Exchange Commission (or any successor rule to the same effect) as in
effect from time to time.
(u) "Subsidiary" means, at any time, any corporation in which
at the time the Company then owns or controls, directly or indirectly,
not less than 50% of the total combined voting power represented by all
classes of stock issued by such corporation.
3. Shares Available Under Plan. Subject to adjustments as provided in
Paragraph 12, the maximum number of shares of Common Stock which may be issued
with respect to Awards under this Plan is 882,957. Such
<PAGE> 4
shares may be shares of original issuance or treasury shares or a combination of
the foregoing. Upon the payment of any Phantom Shares, there will be deemed to
have been delivered under this Plan for purposes of this Paragraph 3 the number
of shares of Common Stock equal to the Phantom Shares regardless of whether such
Phantom Shares were paid in cash or shares of Common Stock. Subject to the
provisions of the preceding sentence, any shares of Common Stock which are
subject to Option Rights or Phantom Shares awarded that are terminated
unexercised, forfeited or surrendered or which expire for any reason will again
be available for issuance under this Plan. No person may receive Option Rights,
Phantom Shares and Bonus Stock awards with respect to more than 100,000 shares
during any calendar year. Further, the maximum value of Performance Units that
may be granted to any person during any calendar year may not exceed $1 million.
4. Option Rights. The Committee may from time to time make grants to
any Employee of options to purchase shares of Common Stock upon such terms and
conditions as it may determine in accordance with the following provisions:
(a) Each grant will specify the number of shares of Common
Stock to which it pertains.
(b) Each grant will specify its Option Price, which may not be
less than 100% of the Market Value per Share on the Date of Grant.
(c) Each grant will specify that the Option Price will be
payable (i) in cash or by check payable and acceptable to the Company
or (ii) to the extent provided for in the option agreement, (a) by
tendering to the Company shares of Common Stock owned by the optionee
for at least six months, if acquired pursuant to a Company stock
option, and having an aggregate Market Value Per Share as of the date
of exercise and tender that is not greater than the full Option Price
for the shares with respect to which the Option is being exercised and
by paying any remaining amount of the Option Price as provided in (i)
above (provided that the Committee may, upon confirming that the
optionee owns the number of shares being tendered, authorize the
issuance of a new certificate for the number of shares being acquired
pursuant to the exercise of the option less the number of shares being
tendered upon the exercise and return to the optionee (or not require
surrender of) the certificate for the shares being tendered upon the
exercise) or (b) by the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash or a check payable and
acceptable to the Company to pay the Option Price and any required tax
withholding amounts; provided that in the event the optionee chooses to
pay the Option Price and withholding taxes as provided in (ii)(b)
above, the optionee and the broker shall comply with such procedures
and enter into such agreements as the Committee may prescribe as a
condition of such payment procedure, or (iii) by a combination of such
payment methods. Payment instruments will be received subject to
collection.
(d) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant
remain unexercised.
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company and the
Subsidiaries and/or the Performance Objectives (if any) to be achieved
before the Option Rights or installments thereof will become
exercisable, and any grant may provide, in the Committee's discretion,
for the earlier vesting of the Option Rights upon termination of the
Participant's employment due to death, disability or retirement.
(f) Each grant the exercise of which, or the timing of the
exercise of which, is dependent, in whole or in part, on the
achievement of Performance Objectives may specify a minimum level of
achievement in respect of the specified Performance Objectives below
which no Options Rights will be exercisable and may set forth a formula
or other method for determining the number of Option Rights that will
be exercisable if performance is at or above such minimum but short of
full achievement of the Performance Objectives.
<PAGE> 5
(g) Option Rights granted under this Plan may be (i) options
which are intended to qualify as incentive stock options under Section
422 of the Code, (ii) options which are not intended to so qualify or
(iii) combinations of the foregoing, as specified in the option
agreement.
(h) Option Rights granted to a Participant who is an officer
of the Company may, in the discretion of the Committee, provide for an
automatic "reload" grant upon the exercise of the Option Right with
shares of Common Stock, with such terms and conditions on any such
reload grant as the Committee may choose, provided, however, the Option
Price may not be less than 100% of the Market Value per Share on the
Date of Grant of the reload option and its term may not exceed the
remaining term for the exercised portion of the Option Right.
(i) Each grant shall specify the period during which the
Option Right may be exercised, but no Option Right will be exercisable
more than ten years from the Date of Grant.
(j) Each grant of Option Rights will be evidenced by an
agreement executed on behalf of the Company by any authorized officer
and delivered to the Participant and containing such terms and
provisions consistent with this Plan, as the Committee may approve.
Notwithstanding the foregoing, Option Rights may be granted
from time to time in substitution for stock options held by employees of other
corporations who become Employees as the result of a merger or consolidation
of the employing corporation with the Company or any Subsidiary, or the
acquisition by the Company or any Subsidiary of the assets of the employing
corporation, or the acquisition by the Company or any Subsidiary of stock of
the employing corporation as the result of which it becomes a Subsidiary. The
terms and conditions of substitute Option Rights granted may vary from the
terms and conditions set forth above, to the extent the Committee, at the time
of grant, deems it appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are granted.
5. Phantom Shares. The Committee may also from time to time make grants
to any Employee of Phantom Shares upon such terms and conditions as it may
determine in accordance with the following provisions:
(a) Each grant will specify the number of Phantom Shares to
which it pertains, and whether phantom dividends will be credited on
such Phantom Shares.
(b) Each grant will specify the Performance Objectives that
are to be achieved in order for the Phantom Shares to be earned, and
will specify a minimum acceptable level of achievement in respect of
the specified Performance Objectives below which the Phantom Shares
will be forfeited and may set forth a formula or other method for
determining the number of Phantom Shares to be earned if performance is
at or above such minimum but short of full achievement of the
Performance Objectives.
(c) Each grant will specify the time and manner of payment of
Phantom Shares which have been earned, which payment may be made in (i)
cash, (ii) shares of Common Stock or (iii) any combination thereof, as
determined by the Committee in its sole discretion.
(d) Each grant of Phantom Shares will be evidenced by an
agreement executed on behalf of the Company by any authorized officer
and delivered to the Participant and containing such terms and
provisions, consistent with this Plan, as the Committee may approve,
which may include provisions relating to vesting upon termination of
the Participant's employment due to death, disability or retirement.
6. Performance Units. The Committee may also from time to time make
grants to any Employee of Performance Units upon such terms and conditions as it
may determine in accordance with the following provisions:
(a) Each grant will specify the number of Performance Units to
which it pertains.
<PAGE> 6
(b) Each grant will specify the Performance Objectives that
are to be achieved in order for the Performance Units to be earned and
will specify a minimum acceptable level of achievement in respect of
the specified Performance Objectives below which no payment will be
made and may set forth a formula or other method for determining the
amount of payment to be made if performance is at or above such minimum
but short of full achievement of the Performance Objectives.
(c) Each grant will specify the time and manner of payment of
Performance Units which have become payable, which payment may be made
in (i) cash, (ii) shares of Common Stock having an aggregate Market
Value per Share equal to the aggregate value of the Performance Units
which have become payable or (iii) any combination thereof, as
determined by the Committee in its sole discretion at the time of
payment.
(d) Each grant of a Performance Unit will be evidenced by an
agreement executed on behalf of the Company by any authorized officer
and delivered to the Participant and containing such terms and
provisions, consistent with this Plan, as the Committee may approve,
which may include provisions relating to vesting upon the termination
of the Participant's employment due to death, disability or retirement.
7. Bonus Stock. The Committee may also from time to time make grants to
any Employee of Bonus Stock, which shall constitute a transfer of shares of
Common Stock, without other payment therefor, as additional compensation for the
Participant's services to the Company or its Subsidiaries.
8. Other Stock-Based Awards. The Committee may also grant to Employees
an Other Stock-Based Award, which shall consist of a right which (i) is not an
Award described in Paragraphs 4 through 7 and (ii) is denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
shares of Common Stock as is deemed by the Committee to be consistent with the
purposes of the Plan. Subject to the terms of the Plan, the Committee shall
determine the terms and conditions of any such Other Stock-Based Award. In
addition, and without limiting the foregoing, the Committee may, in its sole
discretion, permit a Participant, who is an Employee, to elect to defer, in the
form of Phantom Shares, all or a portion of the payment of an Award until a
specified future time, but in no event for more than five years or, if earlier,
the date of termination of employment.
9. Director Options. (a) Each Director who is elected or appointed to
the Board for the first time after April 23, 1996 shall automatically receive,
on the date of his or her election or appointment, a Director Option for 7,500
shares of Common Stock, which shall become vested as to one-third of the shares
on each anniversary of the Date of Grant; provided, however, if the Director
ceases to be a member of the Board, his unvested Director Options, if any, on
such date shall be automatically canceled unpaid, unless such termination is due
to death or disability, in which event the unvested Director Options shall be
automatically vested in full.
(b) On the day of the regular Annual Meeting of the Stockholders of the
Company in each year that this Plan is in effect (commencing with the 1996
Annual Meeting of Stockholders), each Director who is in office immediately
after such annual meeting and who was not elected or appointed to the Board for
the first time at such annual meeting shall automatically receive a Director
Option for 2,500 shares of Common Stock, which shall be 100% vested on the Date
of Grant.
(c) Each Director Option will be subject to all of the limitations
contained in the following provisions:
(i) The Option Price of each Director Option shall be the
Market Value per Share on its Date of Grant.
(ii) Each Director Option that is vested may be exercised in
full at one time or in part from time to time by giving written notice
to the Company, stating the number of shares of Common Stock with
respect to which the Director Option is being exercised, accompanied by
payment in full of the Option Price for such shares, which payment may
be (1) in cash by check acceptable to the Company, (2) by tendering to
the Company shares of Common Stock owned by the optionee for more than
six months and having an aggregate
<PAGE> 7
Market Value Per Share as of the date of exercise and tender that is
not greater than the full Option Price for the shares with respect to
which the Option is being exercised and by paying any remaining amount
of the Option Price as provided in (1) above (provided that the
Committee may, upon confirming that the optionee owns the number of
shares being tendered, authorize the issuance of a new certificate for
the number of shares being acquired pursuant to the exercise of the
option less the number of shares being tendered upon the exercise and
return to the optionee (or not require surrender of) the certificate
for the shares being tendered upon the exercise), (3) by the optionee
delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to pay
the Option Price and any required tax withholding amounts; provided
that in the event the optionee chooses to pay the Option Price in this
manner, the optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment procedure, or
(4) by a combination of such methods of payment. Payment instruments
will be received subject to collection.
(iii) Each Director Option shall expire 10 years from the Date
of Grant thereof, but shall be subject to earlier termination as
follows: Director Options, to the extent exercisable as of the date the
Director ceases to serve as a director of the Company for any reason,
including death, must be exercised within three years of such date
unless the Director is removed for cause, in which event the Director
Option must be exercised within three months from the date of such
removal; provided however, that in no event shall the normal expiration
date of such Director Options be extended.
(iv) In the event that the number of shares of Common Stock
available for grants under this Plan is insufficient to make all
automatic grants provided for in this Paragraph 9 on the applicable
date, then all Directors who are entitled to a grant on such date shall
share ratably in the number of shares then available for grant under
this Plan, and shall have no right to receive a grant with respect to
the deficiencies in the number of available shares and all future
grants under this Paragraph 9 shall terminate.
10. Acceleration upon a Change in Control. Notwithstanding anything
contained in the Plan to the contrary, all conditions and/or restrictions
relating to the continued performance of services and/or the achievement of
Performance Objectives with respect to the exercisability or full entitlement to
any Award shall immediately lapse upon a Change in Control.
11. Transferability. (a) Except as provided below, (1) no Award (or any
interest therein) will be transferable by a Participant other than by (i) will
or the laws of descent and distribution or (ii) a qualified domestic relations
order and (2) an Option Right will be exercisable during the Participant's
lifetime only by the Participant or by the Participant's guardian or legal
representative.
(b) The Committee may, in its discretion, provide in an option
agreement that the Option Right granted to the Participant (other than an
incentive stock option) may be transferred (in whole or in part and shall be
subject to such terms and conditions as the Committee may impose thereon) by the
Participant to (i) the spouse, children or grandchildren of the Participant
("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of the Immediate Family Members and, if applicable, the Participant or (iii) a
partnership in which such Immediate Family Members and, if applicable, the
Participant are the only partners. Following transfer, any such transferred
Option Rights shall continue to be subject to the same terms and conditions as
were applicable to the Option Rights immediately prior to transfer; provided,
however, that no transferred Option Rights shall be exercisable unless
arrangements satisfactory to the Company have been made to satisfy any tax
withholding obligations the Company may have with respect to the Option Rights.
12. Adjustments. The Board may make or provide for such adjustments in
the maximum number of shares specified in Paragraph 3, in the numbers of shares
of Common Stock covered by outstanding Director Options, Option Rights and
Phantom Shares granted hereunder, in the Option Price applicable to any such
Director Options and Option Rights, and/or in the kind of shares covered thereby
(including shares of another issuer), as the Board, in its sole
<PAGE> 8
discretion exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of Participants that otherwise
would result from any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company,
merger, consolidation, reorganization, partial or complete liquidation, issuance
of rights or warrants to purchase securities or any other corporation
transaction or event having an effect similar to any of the foregoing.
13. Fractional Shares. The Company will not be required to issue any
fractional share of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions for the settlement of fractions in
cash.
14. Withholding of Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any grant or
payment made to a Participant or any other person under this Plan, it will be a
condition to the receipt of such grant or payment that the Participant or such
other person make arrangements satisfactory to the Company for the payment of
such taxes required to be withheld. The Committee may provide in any grant
agreement that such taxes may be satisfied by the relinquishment of a portion of
such Award or payment.
15. Administration of the Plan. (a) This Plan will be administered by
the Committee. A majority of the Committee will constitute a quorum, and the
action of the members the Committee present at any meeting at which a quorum is
present, or acts unanimously approved writing, will be the acts of the
Committee.
(b) The interpretation and construction by the Committee of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of an Award and any determination by the Committee pursuant to any
provision of this Plan or of any such agreement, notification or documentation
will be final and conclusive. No member of the Committee will be liable for any
such action or determination made in good faith or in the absence of gross
negligence or willful misconduct on the part of such member.
16. Amendments, Etc. (a) The Board may amend or terminate the Plan or
the Committee's authority to grant Awards under the Plan without the consent of
stockholders or Participants, except that any such action shall be subject to
the approval of the Company's stockholders at or before the next annual meeting
of stockholders for which the record date is after such Board action if such
stockholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the
Common Stock may then be listed or quoted, and the Board may otherwise, in its
discretion, determine to submit other such changes to the Plan to stockholders
for approval; provided, however, that without the consent of an affected
Participant, no such action may materially impair the rights of such Participant
under any Award theretofore granted to him.
(b) This Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
17. Effectiveness, Term, Etc. This amendment of the Plan shall be
effective upon its approval by the Company's stockholders at the 1997 annual
meeting of the stockholders of the Company; provided, however, in the event that
this amendment is not approved by the stockholders of the Company at such
meeting, it shall be automatically null and void for all purposes.
Notwithstanding anything in this amendment and restatement to the contrary, no
provision herein shall be applicable to any incentive stock option outstanding
prior to May 28, 1997 if such provision would constitute a "modification" of
such incentive stock option, within the meaning of Section 424 of the Code.
Unless sooner terminated, this Plan shall terminate on April 24, 2005 and no
further Awards shall be made after such date, but all outstanding Awards on such
date shall remain effective in accordance with their terms and the terms of this
Plan.
<PAGE> 1
EXHIBIT 99.2
FIRST AMENDMENT TO THE ADMINISTAFF, INC. 1997 INCENTIVE PLAN
WHEREAS, the Board of Directors of Administaff, Inc. (the "Board") is
authorized by Paragraph 16 of the Administaff, Inc. 1997 Incentive Plan (the
"Plan") to amend the Plan from time to time; and
WHEREAS, the Board deems it advisable to amend the Plan in certain
respects;
NOW, THEREFORE, Paragraphs 9(a) and (b) of the Plan are hereby amended
in their entirety to read as set forth below, effective as of May 28, 1997:
(a) Each Director who is elected or appointed to the Board for the
first time on or after May 28, 1997 shall automatically receive, on the
date of his or her election or appointment, a Director Option for 7,500
shares of Common Stock, which shall become vested as to one-third of
the shares on each anniversary of the Date of Grant; provided, however,
if the Director ceases to be a member of the Board, his unvested
Director Options, if any, on such date shall be automatically canceled
unpaid, unless such termination is due to death or disability, in which
event the unvested Director Options shall be automatically vested in
full.
(b) On the day of the regular Annual Meeting of the Stockholders of the
Company in each year that this Plan is in effect (commencing with the
1996 Annual Meeting of Stockholders), each Director who is in office
immediately after such annual meeting and who was not elected or
appointed to the Board for the first time at such annual meeting shall
automatically receive a Director Option for 2,500 shares of Common
Stock, which shall be 100% vested on the Date of Grant.
All terms used herein that are defined in the Plan shall have the same
meanings given to such terms in the Plan, except as otherwise expressly provided
herein.
Except as amended and modified hereby, the Plan shall continue in full
force and effect and the Plan and this amendment shall be read, taken and
construed as one and the same instrument.
<PAGE> 1
EXHIBIT 99.3
SECOND AMENDMENT
TO THE
ADMINISTAFF, INC.
1997 INCENTIVE PLAN
WHEREAS, the Board of Directors of Administaff, Inc. (the "Board") is
authorized by Paragraph 16 of the Administaff, Inc. 1997 Incentive Plan (the
"Plan") to amend the Plan from time to time; and
WHEREAS, the Board deems it advisable to amend the Plan as provided
herein;
NOW, THEREFORE, paragraph 15 of the Plan is hereby amended effective as
of September 15, 1997, by adding thereto a new subparagraph (c) to read as
follows:
"(c) Subject to the following, the committee, in its sole
discretion, may delegate any or all of its powers and duties under the
Plan, including the power to grant Awards under the Plan, to the
President of the Company, subject to such limitations on such delegated
powers and duties as the Committee may impose. Upon any such delegation
all references in the Plan to the "Committee" shall be deemed to
include the President; however, notwithstanding the foregoing, the
President may not grant Awards to, or take any action with respect to
any Award previously granted to, a person who is an officer or a
director of the Company or otherwise subject to Section 16(b) of the
Exchange Act."
All terms used herein that are defined in the Plan shall have the same
meanings given to such terms in the Plan, except as otherwise expressly provided
herein.
Except as amended and modified hereby, the Plan shall continue in full
force and effect and the Plan and this amendment shall be read, taken and
construed as one and the same instrument.
<PAGE> 1
EXHIBIT 99.4
THIRD AMENDMENT TO 1997 INCENTIVE PLAN
GENERAL
In May 1997, the Board of Directors of the Company adopted and the
Stockholders approved the 1997 Incentive Plan (the "1997 Plan"). At a meeting of
the Board of Directors of the Company on [ ], the Board of Directors adopted a
proposal to further amend the 1997 Plan. The sole proposed amendment to the 1997
Plan is to increase the maximum number of shares of Common Stock of the Company
issuable under the Plan from 882,957 shares to 1,482,957 shares.
The proposal to amend the 1997 Plan is subject to stockholder approval.
REASONS FOR AND PRINCIPAL EFFECTS OF THE PROPOSED AMENDMENT
The Board believes that the availability of an adequate number of
shares available for grant under the 1997 Plan is an important factor in
attracting, retaining and motivating qualified employees essential to the
success of the Company. The Board further believes that the number of shares
remaining available for issuance will be insufficient to achieve the purpose of
the 1997 Plan over the term of the plan unless additional shares are authorized.
Accordingly, the current proposal would increase the aggregate number of shares
of Common Stock that may be issued under the 1997 Plan to 1,482,957 shares.
SUMMARY OF THE 1997 INCENTIVE PLAN
The summary description that follows is qualified by reference to the
1997 Plan, as most recently amended and restated by the Board of Directors on
May 28, 1997, a copy of which will be available to any shareholder upon written
request.
Eligibility for Participation. All employees, including officers, of
the Company and its subsidiaries are eligible for participation in all Awards
under the 1997 Incentive Plan, other than automatic Director options. Only
nonemployee directors of the Company (excluding any director who is an employee
or affiliated with American Express) ("Directors") will receive automatic grants
of Director options.
Administration. The 1997 Incentive Plan is administered by the
Compensation Committee of the Company's Board of Directors. Except with respect
to the automatic grant of Director options and elective deferrals by Directors
of all or part of their annual retainer in the form of phantom shares, the
Compensation Committee will select the employees who will receive Awards,
determine the type and terms of Awards to be granted and interpret and
administer the 1997 Incentive Plan.
Employee Stock Options. Stock options granted to employees are subject
to such terms and conditions as may be established by the Compensation
Committee, which may include conditioning the exercisability of an option on the
achievement of one or more performance goals, except that in all events: (i) no
stock options may be granted after the termination of the 1997 Incentive Plan;
(ii) the option exercise price cannot be less than the market value per share of
the Common Stock at the date of grant (unless it is a replacement option granted
to new employees in conjunction with an acquisition of the stock or property of
another corporation); and (iii) no stock option may be exercised more than 10
years after it is granted. Stock options may be granted either as incentive
stock options ("ISOs") under Section 422 of the Code, nonqualified stock options
or a combination thereof. In addition, the Compensation Committee may provide,
with respect to an option granted to an officer, that such option, if exercised
with Common Stock, will have an automatic "reload" grant feature, with such
terms and conditions as the Compensation Committee may establish for such
reload.
<PAGE> 2
The Compensation Committee will determine the form in which payment of
the optionee's exercise price may be made, which may include cash, shares of
Common Stock already owned by the optionee for more than six months, a "cashless
broker exercise" through procedures established by the Company, or any
combination thereof.
Director Stock Options. The 1997 Incentive Plan provides that each
Director of the Company shall automatically receive on the date of each annual
meeting of the Company's stockholders (unless first elected or appointed at such
meeting) an immediately vested option to purchase 2,500 shares of Common Stock
at an exercise price per share equal to the fair market value of the Common
Stock on the date of grant. Each person who becomes a Director of the Company
shall automatically receive an option to purchase 7,500 shares of Common Stock
on the date of such person's election or appointment at an exercise price per
share equal to the fair market value of the Common Stock on the date of grant
and such option shall vest as to one-third of the shares on each anniversary of
its grant date. Neither the Compensation Committee nor the Board of Directors
has any discretion with respect to Director options. Each Director option shall
have a term of 10 years, subject to earlier termination depending upon
continuity of service on the Board.
Phantom Shares. The Compensation Committee may grant phantom shares of
Common Stock to employees, which may be payable in cash, shares of Common Stock
or a combination thereof, subject to the achievement of specified performance
goals. The Compensation Committee shall determine the performance goals to be
achieved and the length of the performance period.
Performance Units. The Compensation Committee may also grant
performance units to employees. Performance units are units equivalent to $100
(or such other value as the Compensation Committee determines) and may consist
of payments in cash, shares of Common Stock or a combination thereof, payable
upon the achievement of specified performance goals. The Compensation Committee
shall determine the performance goals to be achieved and the length of the
performance period.
Bonus Stock. The Compensation Committee may deliver unrestricted shares
of Common Stock to an employee as additional compensation for the person's
services to the Company or a subsidiary in lieu of or in addition to a cash
bonus.
Other Stock-Based Awards. The Compensation Committee, in its
discretion, may grant other forms of Awards based on, or payable in, shares of
Common Stock. Subject to certain limitations, participants, including directors,
may elect to defer the receipt of an Award or other compensation in the form of
phantom shares for limited periods.
Performance Objectives. The Compensation Committee shall subject grants
of phantom shares and performance units and, in its discretion, may condition
the exercisability of employee stock options, on the attainment of certain
performance objectives. The term "Performance Objectives" means the objectives,
if any, established by the Compensation Committee that are to be achieved with
respect to an Award granted under this Plan, which may be described in terms of
Company-wide objectives, in terms of objectives that are related to performance
of a division, Subsidiary, department, geographic market or function within the
Company or a Subsidiary in which the Participant receiving the Award is
employed, or in individual or other terms, and which will relate to the period
of time (Performance Cycle) determined by the Compensation Committee. The
Performance Objectives intended to qualify under Section 162(m) of the Code
shall be with respect to one or more of the following: (i) net earnings; (ii)
operating income; (iii) earnings before interest and taxes ("EBIT"); (iv)
earnings before interest, taxes, depreciation, and amortization expenses
("EBITDA"); (v) earnings before taxes and unusual or nonrecurring items; (vi)
total revenue; (vii) return on investment; (viii) return on equity; (ix) return
on total capital; (x) return on assets; (xi) total stockholder return; (xii)
return on capital employed in the business; (xiii) stock price performance;
(xiv) earnings per share growth; (xv) cash flows; (xvi) total profit; (xvii)
operating expenses; (xviii) fee revenue; (xix) total revenue less bonus payroll;
(xx) the number of paid worksite employees; and
<PAGE> 3
(xxi) gross mark-up per worksite employee. Which objectives to use with respect
to an Award, the weighting of the objectives if more than one is used, and
whether the objective is to be measured against a Company-established budget or
target, an index or a peer group of companies, shall be determined by the
Compensation Committee in its discretion at the time of grant of the Award. A
Performance Objective need not be based on an increase or a positive result and
may include, for example, maintaining the status quo or limiting economic
losses. The Compensation Committee, in its sole discretion and without the
consent of the Participant, may amend (i) any stock-based Award to reflect (1) a
change in corporate capitalization, such as a stock split or dividend; (2) a
corporate transaction, such as a corporate merger, a corporate consolidation,
any corporate separation (including a spinoff or other distribution of stock or
property by a corporation), any corporate reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code), (3) any partial or complete corporate liquidation, or (4) a change in
accounting rules required by the Financial Accounting Standards Board, and (ii)
any Award that is not intended to meet the requirements of Section 162(m) of the
Code, to reflect a significant event that the Compensation Committee, in its
sole discretion, believes to be appropriate to reflect the original intent in
the grant of the Award.
Annual Award Limits. The maximum number of shares of Common Stock with
respect to which any employee can receive stock options, bonus stock, phantom
shares, and other stock-based awards during any calendar year under the 1997
Incentive Plan is 100,000. In addition, no employee can receive performance unit
grants having a value in excess of $1.0 million in any calendar year.
Transferability. Awards under the 1997 Incentive Plan generally will
not be transferable other than by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order; provided, however, the
Compensation Committee may, in its discretion, permit a participant to transfer
nonqualified stock options to the participant's "immediate family members", as
defined in the 1997 Incentive Plan.
Adjustments. The Compensation Committee may provide for adjustment of
Awards under the 1997 Incentive Plan if it determines such adjustment is
required to prevent dilution or enlargement of the rights of participants in the
1997 Incentive Plan that would otherwise result from a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation,
reorganization or other similar corporate transaction.
Tax Withholding. The 1997 Incentive Plan permits the Compensation
Committee to allow a participant, upon exercise of an option or payment of an
Award, to satisfy any applicable federal tax withholding requirements in the
form of shares of Common Stock, including shares issuable upon exercise or
payment of such Award.
Change in Control. The 1997 Incentive Plan provides that upon a "change
in control" of the Company, all Awards shall become immediately exercisable or
payable, as the case may be. A "change in control" of the Company shall be
deemed to occur: (i) on the date any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended) acquires (directly or indirectly) the beneficial ownership (within
the meaning of Rule 13d-3 promulgated under such Act) of 30% or more of either
the then outstanding shares of common stock of the Company or the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors; (ii) on the date the individuals who constitute the Board
as of May 28, 1997 (the "Incumbent Board"), cease for any reason to constitute
at least a majority of the members of the Board, provided that any person
becoming a director subsequent to May 28, 1997 whose appointment, election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than any individual whose nomination for election to Board membership was not
endorsed by the Company's management prior to, or at the time of, such
individual's initial nomination for election) shall be, for purposes of this
Plan, considered as though such person were a member of the Incumbent Board;
(iii) on the date of consummation of a merger, consolidation, recapitalization,
reorganization, sale or disposition of all or a substantial portion of the
Company's assets,
<PAGE> 4
or the issuance of shares of stock of the Company in connection with the
acquisition of the stock or assets of another entity, provided, however, that a
Change in Control shall not occur under this clause if consummation of the
transaction would result in at least 50% of the total voting power represented
by the voting securities of the Company (or, if not the Company, the entity that
succeeds to all or substantially all of the Company's business) outstanding
immediately after such transaction being beneficially owned (within the meaning
of Rule 13d-3 promulgated pursuant to the Exchange Act) by at least 50% of the
total voting power represented by the voting securities of the Company (or, if
not the Company, the entity that succeeds to all or substantially all of the
Company's business) outstanding immediately after such transaction being
beneficially owned (within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 50% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power of each
such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or (iv) on the date the Company files
a report or proxy statement with the Securities and Exchange Commission pursuant
to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a change in control of
the Company has or may have occurred or will or may occur in the future pursuant
to any then-existing contract or transaction.
Amendment and Termination. The Board of Directors of the Company may
amend or terminate the 1997 Incentive Plan at any time without stockholder
approval, except for any amendment that under applicable law or stock exchange
rules requires stockholder approval. Unless the term of the 1997 Incentive Plan
is extended or earlier terminated, the 1997 Incentive Plan will terminate on
April 24, 2005, after which no additional Awards may be made under it; however,
all then outstanding Awards will continue pursuant to their terms.
<PAGE> 1
EXHIBIT 99.5
FOURTH AMENDMENT
TO THE
ADMINISTAFF, INC. 1997 INCENTIVE PLAN
WHEREAS, the Board of Directors of Administaff, Inc., (the "Board") is
authorized by Paragraph 16 of the Administaff, Inc. 1997 Incentive Plan (the
"Plan") to amend the Plan from time to time; and
WHEREAS, the Board deems it advisable to amend the Plan as provided
herein;
NOW, THEREFORE, BE IT RESOLVED that effective as of July 27, 1999,
Paragraph 2(d)(i) of the Plan is amended to read as follows:
"(i) the date of the acquisition by any "person"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 ("Exchange Act")), excluding
the Company or any of its Subsidiaries, of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of 30% or more of either the then outstanding shares of
common stock of the Company, or the then outstanding voting
securities entitled to vote generally in the election of
directors; or"; and
FURTHER RESOLVED, that effective as of July 27, 1999, Paragraph
2(d)(iii) of the Plan is amended to read as follows:
"(iii) the date of consummation of a merger,
consolidation, recapitalization, reorganization, sale or
disposition of all or a substantial portion of the Company's
assets, or the issuance of shares of stock of the Company in
connection with the acquisition of the stock or assets of
another entity, provided, however, that a Change in Control
shall not occur under this clause (iii) if consummation of the
transaction would result in at least 65% of the total voting
power represented by the voting securities of the Company (or,
if not the Company, the entity that succeeds to all or
substantially all of the Company's business) outstanding
immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 65% of the holders of outstanding
voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing
<PAGE> 2
holder relative to other such continuing holders not
substantially altered in the transaction; or".
All terms used herein that are defined in the Plan shall have the same
meanings given to such terms in the Plan, except as otherwise expressly provided
herein.
Except as amended and modified hereby, the Plan shall continue in full
force and effect and the Plan and this amendment shall be read, taken and
construed as one and the same instrument.
<PAGE> 1
EXHIBIT 99.6
ADMINISTAFF, INC.
NONQUALIFIED STOCK OPTION PLAN
Administaff, Inc., a Delaware corporation (the "Company"), hereby
adopts the Administaff, Inc. Nonqualified Stock Option Plan (the "Plan")
effective as of July 27, 1999. The terms and provisions of the Plan are set
forth below.
1. Purpose. The purpose of the Plan is to promote the interests
of the Company by encouraging employees of the Company and its Subsidiaries who
are not officers of the Company to acquire or increase their equity interests in
the Company and to provide a means whereby such persons may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to remain with and devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its stockholders. The Plan is also contemplated to enhance the
ability of the Company and its Subsidiaries to attract and retain the services
of individuals who are believed to be essential for the continued growth and
profitability of the Company.
2. Definitions. As used in this Plan:
(a) "Board" means the Board of Directors of the Company.
(b) "CEO" means the Chief Executive Officer of the
Company.
(c) "Change in Control" shall be deemed to have occurred
upon:
(i) the date of the acquisition by any "person"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 ("Exchange Act")), excluding
the Company or any of its Subsidiaries, of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of 30% or more of either the then outstanding shares of
common stock of the Company, or the then outstanding voting
securities entitled to vote generally in the election of
directors; or
(ii) the date the individuals who constitute the
Board as of May 28, 1997 (the "Incumbent Board"), cease for
any reason to constitute at least a majority of the members of
the Board, provided that any person becoming a director
subsequent to May 28, 1997 whose election, or nomination for
election by the Company's stockholders, was approved by a vote
of at least a majority of
<PAGE> 2
the directors then comprising the Incumbent Board (other than
any individual whose nomination for election to Board
membership was not endorsed by the Company's management prior
to, or at the time of, such individual's initial nomination
for election) shall be, for purposes of this Plan, considered
as though such person were a member of the Incumbent Board;
(iii) the date of consummation of a merger,
consolidation, recapitalization, reorganization, sale or
disposition of all or a substantial portion of the Company's
assets, or the issuance of shares of stock of the Company in
connection with the acquisition of the stock or assets of
another entity, provided, however, that a Change in Control
shall not occur under this clause (iii) if consummation of the
transaction would result in at least 65% of the total voting
power represented by the voting securities of the Company (or,
if not the Company, the entity that succeeds to all or
substantially all of the Company's business) outstanding
immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 65% of the holders of outstanding
voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing
holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the date the Company files a report or proxy
statement with the Securities and Exchange Commission pursuant
to the Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or
may have occurred or will or may occur in the future pursuant
to any then-existing contract or transaction.
(d) "Committee" means the Compensation Committee of the
Board of Directors of the Company
(e) "Common Stock" means the Common Stock, $0.01 par
value, of the Company or any security into which such Common Stock may
be changed by reason of any transaction or event of the type described
in Paragraph 6.
(f) "Date of Grant" means the date specified by the CEO
on which an Option Right will become effective, which date will not be
earlier than the date on which the CEO takes action with respect
thereto.
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<PAGE> 3
(g) "Employee" means an employee of the Company or
Subsidiary who is not an officer of the Company, and any person who has
been offered employment by the Company or a Subsidiary (other than as
an officer of the Company), provided that any Option Right granted to
such prospective employee shall be canceled if such person fails to
commence such employment, and no such Option Right shall be exercisable
before such person has commenced such employment.
(h) "Market Value per Share" means, at any date, the
closing sale price per share of the Common Stock on that date (or, if
there are no sales on that date, the last preceding date on which there
was a sale) in the principal market in which the Common Stock is
traded.
(i) "Option Price" means the purchase price per share
payable on exercise of an Option Right.
(j) "Option Right" means the right to purchase a share of
Common Stock upon exercise of an option granted pursuant to Paragraph
4.
(k) "Participant" means an Employee who is selected by
the CEO to receive an Option Right.
(l) "subsidiary" means, at any time, any corporation or
other entity in which at the time the Company then owns or controls,
directly or indirectly, not less than 50% of the total combined voting
power represented by all classes of equity interests issued by such
corporation or entity.
3. Shares Available Under Plan. Subject to adjustments as
provided in Paragraph 6, the maximum number of shares of Common Stock with
respect to Option Rights may be granted in any calendar year under this Plan is
SIX HUNDRED THOUSAND (600,000); however, any shares of Common Stock which are
subject to Option Rights that are terminated unexercised, forfeited or
surrendered or which expire for any reason during that same calendar year in
which such Option Rights were granted will again be available for issuance that
calendar year. Such shares may be shares of original issuance or treasury shares
or a combination of the foregoing.
4. Option Rights. The CEO may from time to time make grants to
any Employee of options to purchase shares of Common Stock upon such terms and
conditions as the CEO may determine, to the extent not inconsistent with the
following provisions:
(a) Each grant will specify the number of shares of
Common Stock to which it pertains.
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<PAGE> 4
(b) Each grant will specify its Option Price, which may
not be less than 100% of the Market Value per Share on the Date of
Grant.
(c) Each grant will specify that the Option Price will be
payable (i) in cash or by check payable and acceptable to the Company
or (ii) to the extent provided for in the option agreement, (a) by
tendering to the Company shares of Common Stock owned by the optionee
for at least six months, if acquired pursuant to a Company stock
option, and having an aggregate Market Value Per Share as of the date
of exercise and tender that is not greater than the full Option Price
for the shares with respect to which the Option is being exercised and
by paying any remaining amount of the Option Price as provided in (i)
above (provided that the CEO may, upon confirming that the optionee
owns the number of shares being tendered, authorize the issuance of a
new certificate for the number of shares being acquired pursuant to the
exercise of the option less the number of shares being tendered upon
the exercise and return to the optionee (or not require surrender of)
the certificate for the shares being tendered upon the exercise) or (b)
by the optionee delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the
Company to pay the Option Price and any required tax withholding
amounts; provided that in the event the optionee chooses to pay the
Option Price and withholding taxes as provided in (ii)(b) above, the
optionee and the broker shall comply with such procedures and enter
into such agreements as the CEO may prescribe as a condition of such
payment procedure, or (iii) by a combination of such payment methods.
Payment instruments will be received subject to collection.
(d) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant
remain unexercised.
(e) Each grant will specify the required period or
periods of continuous service by the Participant with the Company and
the Subsidiaries and any performance objectives to be achieved, as
established by the CEO, before the Option Rights or installments
thereof will become exercisable, and any grant may provide, in the
CEO's discretion, for the earlier vesting of the Option Rights upon
termination of the Participant's employment due to death, disability or
retirement. In addition, the CEO may, in his discretion, accelerate the
vesting, in whole or in part, of all or any outstanding Options of one
or more, including all, Participants. Any such action taken by the CEO
need not be uniform as to Participants.
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<PAGE> 5
(f) Each grant the exercise of which, or the timing of
the exercise of which, is dependent, in whole or in part, on the
achievement of performance objectives or other criteria may specify a
minimum level of achievement in respect of the specified performance
objectives or other criteria below which no Option Rights will be
exercisable and may set forth a formula or other method for determining
the number of Option Rights that will be exercisable if performance is
at or above such minimum but short of full achievement of the
performance objectives.
(g) Option Rights granted under this Plan shall be
options which are not intended to qualify as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended.
(h) Each grant shall specify the period during which the
Option Right may be exercised, but no Option Right will be exercisable
more than ten years from the Date of Grant.
(i) Each grant of Option Rights will be evidenced by an
agreement executed on behalf of the Company by any authorized officer
and delivered to the Participant and containing such terms and
provisions consistent with this Plan, as the CEO may approve.
(j) Notwithstanding anything contained in the Plan to the
contrary, all Option Rights shall immediately become exercisable in
full upon a Change in Control.
5. Transferability. No Option Right (or any interest
therein) will be transferable by a Participant other than by (i) will or the
laws of descent and distribution or (ii) a qualified domestic relations order
and an Option Right will be exercisable during the Participant's lifetime only
by the Participant or by the Participant's guardian or legal representative.
6. Adjustments. The Committee may make or provide for
such adjustments in the maximum number of shares of Common Stock specified in
Paragraph 3, in the numbers of shares of Common Stock covered by outstanding
Option Rights granted hereunder, in the Option Price applicable to any such
Option Rights, and/or in the kind of shares covered thereby (including shares of
another issuer), as the Committee, in its sole discretion exercised in good
faith, may determine is equitably required to prevent dilution or enlargement of
the rights of Participants that otherwise would result from any stock dividend,
stock split, combination of shares, recapitalization or other change in the
capital structure of the Company, merger, consolidation, reorganization, partial
or complete liquidation, issuance of rights or warrants to purchase securities
or any other corporation transaction or event having an effect similar to any of
the foregoing.
-5-
<PAGE> 6
7. Fractional Shares. The Company will not be required to issue
any fractional share of Common Stock pursuant to this Plan. The CEO may provide
for the elimination of fractions for the settlement of fractions in cash.
8. Withholding of Taxes. To the extent that the Company is
required to withhold federal, state, local or foreign taxes in connection with
any grant to or exercise by a Participant or any other person under this Plan,
it will be a condition to the receipt of such grant or exercise that the
Participant or such other person make arrangements satisfactory to the Company
for the payment of such taxes required to be withheld. The CEO may provide in
any grant agreement that such taxes may be satisfied by the relinquishment of a
portion of such Award or payment.
9. Administration of the Plan. (a) This Plan will be administered
by the CEO, who may delegate ministerial matters to such person or persons as
the CEO may choose.
(b) The interpretation and construction by the CEO of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of an Option Right and any determination by the CEO pursuant to any
provision of this Plan or of any such agreement, notification or documentation
will be final and conclusive. The CEO will not be liable for any such action or
determination made in good faith or in the absence of gross negligence or
willful misconduct on the part of the CEO.
10. Amendments. The Committee may amend or terminate the Plan or
the CEO's authority to grant Option Rights under the Plan without the consent of
stockholders or Participants; provided, however, the Committee may, in its
discretion, determine to submit any changes to the Board for approval. Upon
submission to the Board, the Board may, in its discretion, determine to submit
any changes to stockholders for approval; and provided, further, no such action
by either the Committee or the Board may be taken which would materially impair
the rights of a Participant under any Option Right theretofore granted to him
without the consent of the Participant.
11. No Employment Rights. This Plan will not confer upon any
Participant any right with respect to continuance of employment or other service
with the Company or any Subsidiary, nor will it interfere in any way with any
right the Company or any Subsidiary would otherwise have to terminate such
Participant's employment or other service at any time.
12. Effective Date. The Plan shall be effective upon its approval
by the Committee.
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