EXHIBIT 10.20
SPHERION CORPORATION
STOCK PURCHASE ASSISTANCE PLAN
1. PURPOSE
The Board of Directors of Spherion Corporation (the "Company") has
established Company stock ownership guidelines for Company executives (the
"Guidelines") as a means of aligning the interests of Company executives and
stockholders. The purpose of the Spherion Corporation Stock Purchase Assistance
Plan (the "Plan") is to facilitate investment by Company executives in shares of
Company stock at levels at least sufficient to satisfy the Guidelines.
2. DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Change in Control" of the Company for purposes of this Plan shall be
as determined, prospectively, from time to time, by the Board, pursuant to the
affirmative vote of at least two-thirds of those members of the Board (i) who
have served on the Board for at least two years prior to such determination, and
(ii) whose election, or nomination for election, during such two-year period was
approved by a vote of at least two-thirds of the directors then in office who
were directors at the beginning of such two-year period. Written notice of any
such determination, or modification of a previous determination, shall be
provided promptly to the Participants. In the event that at any time during the
effectiveness of this Plan the Board has not established a definition of "Change
in Control" pursuant to the first sentence of this paragraph, for purposes of
this Plan, a "Change in Control" shall be deemed to have occurred upon (i) the
acquisition at any time by a "person" or "group" (as that term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (excluding, for this purpose, the Company or any of its
subsidiaries, any employee benefit plan of the Company or any of its
subsidiaries, an underwriter temporarily holding securities pursuant to such
securities, or a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company) of beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly, of securities representing 25% or more of
the combined voting power in the election of directors of the then-outstanding
securities of the Company or any successor of the Company; (ii) the termination
of service as directors, for any reason other than death, disability or
retirement from the Board, during any period of two consecutive years or less,
of individuals who at the beginning of such period constituted a majority of the
Board, unless the election of or nomination for election of each new director
during such period was approved by a vote of at least two-thirds of the
directors still in office who were directors at the beginning of the period;
(iii) approval by the stockholders of the Company of liquidation of the Company;
(iv) approval by the stockholders of the Company and consummation of any sale or
disposition, or series of related sales or dispositions, of 50% or more of the
assets or earning power of the Company; or (v) approval by the stockholders of
the Company and consummation of any merger or consolidation or statutory share
exchange to which the Company is a party as a result of which the persons who
were stockholders of the Company immediately
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prior to the effective date of the merger or consolidation or statutory share
exchange shall have beneficial ownership of less than 50% of the combined voting
power in the election of directors of the surviving corporation following the
effective date of such merger or consolidation or statutory share exchange.
Notwithstanding anything herein, no acquisition of beneficial ownership of
securities of the Company, merger, sale of assets or other transaction shall be
deemed to constitute a Change in Control for purposes of this Agreement if such
transaction constitutes a "Management Approved Transaction." For purposes of
this Agreement, a "Management Approved Transaction" shall be any transaction,
which would otherwise result in a Change in Control for purposes of this
Agreement in which the acquiring "person", "group" or other entity is either
beneficially owned by, or comprised of, in whole or in part, three or more
members of the Company's executive management, as such was constituted twelve
months prior to such transaction, or is majority owned by, or comprised of, any
employee benefit plan of the Company. Notwithstanding anything herein, no
acquisition of beneficial ownership of securities of the Company, merger, sale
of assets or other transaction shall be deemed to constitute a Change in Control
for purposes of this Agreement if such transaction is approved by the
affirmative vote of at least two-thirds of those members of the Board (i) who
have served on the Board for at least two years prior to such approval, and (ii)
whose election, or nomination for election, during such two-year period was
approved by a vote of at least two-thirds of the directors then in office who
were directors at the beginning of such two-year period.
(c) "Company" means Spherion Corporation, formerly known
as Interim Services Inc., a Delaware corporation.
(d) "Compensation Committee" means the Compensation Committee of the
Board.
(e) "Estimated Tax Rate" means the percentage rate the Compensation
Committee, in its sole and absolute discretion, assigns to a Participant as an
approximation of the Participant's highest marginal federal income tax rate,
based on the Participant's base pay from the Company or a Subsidiary.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Guidelines" means the stock ownership guidelines established by the
Board, as the same may be amended from time to time.
(h) "Participant" means an employee of the Company or any Subsidiary who
is selected by the Committee to participate in the Plan pursuant to Section 3
hereof.
(i) "Plan" means the Spherion Corporation Stock Purchase Assistance
Plan.
(j) "Plan Administrative Committee" means the Plan Administrative
Committee appointed by the Board to administer the Company's employee benefit
plans.
(k) "Repayment Obligation" shall mean the obligation of a Participant to
repay an amount as required by Section 6.
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(l) "Stock" means the common stock of the Company, par value $.01 per
share.
(m) "Stock Acquisition Loan" means an individually secured loan negotiated
with the Company's assistance or prior approval with an approved lending
institution on behalf of a Participant. A Stock Acquisition Loan shall be
obtained by the Participant on the basis of his or her individual credit
worthiness and shall be not guaranteed by the Company. The maximum term for a
Stock Acquisition Loan shall be seven (7) years.
(n) "Subsidiary" means any corporation or other entity in which the
Company owns, directly or indirectly, fifty percent (50%) or more of the total
voting interests or capital interests.
3. PARTICIPATION
The Compensation Committee shall designate those employees of the Company
who shall be eligible to participate in the Plan. Participants may be added or
removed from the Plan at anytime, at the Compensation Committee's discretion.
Unless specifically approved by the Compensation Committee, no person shall be
permitted to receive any payment or other benefit under this Plan unless such
person is currently employed by the Company or any Subsidiary at the time of
receipt of such payment or benefit.
4. STOCK ACQUISITION
(a) PARTICIPATION LEVELS. The Compensation Committee shall designate the
participation level for each Participant through the table set forth in Appendix
A, as the same may be amended from time to time. Under the Plan, each
Participant is eligible to acquire Stock up to the participation level
designated in Appendix A.
(b) STOCK ACQUISITION LOANS. To facilitate the Participant's acquisition
of Stock under the Plan, the Company shall use reasonable efforts to provide
each Participant with access to Stock Acquisition Loans, the proceeds of which
shall be used for such Stock acquisition. Subject to any lending requirements
imposed by an outside lender through which Stock Acquisition Loans are obtained,
a Participant may take out additional Stock Acquisition Loans from time to time
and have multiple Stock Acquisition Loans outstanding at any time.
5. STOCK OWNERSHIP INCENTIVE PAYMENTS
(a) TYPES OF PAYMENTS. Except as provided in Subsection (b), each
Participant may be eligible to receive the following types of Stock Ownership
Incentive Payments under the Plan:
(1) INTEREST PAYMENTS. During the term of any Stock Acquisition
Loan, the Company may reimburse each Participant the amount of interest paid by
the Participant on such Stock Acquisition Loan. Such reimbursements (such
payments being referred to as "Interest Payments") shall be made on a quarterly
basis. During the first three years that any Stock Acquisition Loan is
outstanding, the Interest Payments shall also include a tax equalization "gross
up," equal to the product of (i) the amount of the payment, and (ii) the
Participant's Estimated Tax Rate.
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(2) DISCRETIONARY ADVANCES. The Plan Administrative Committee may
authorize additional cash advances (such payments being referred to as
"Discretionary Advances") to a Participant if, upon a recommendation by the Plan
Administrative Committee, the Compensation Committee determines such advances
are necessary to avoid a sale or other disposition of Stock by such Participant
due to a margin call, or to prevent a sale or disposition of the Stock by such
Participant if, in the Plan Administrative Committee's judgment, such
disposition would be detrimental to the Company or would adversely affect
shareholder value.
(3) NSO REIMBURSEMENTS. In the case of a Participant who exercises a
nonqualified option to acquire Stock ("NSO") in order to satisfy the stock
ownership levels specified in the Guidelines, the Compensation Committee may
authorize additional cash payments (such payments being referred to as "NSO
Reimbursements") to such Participant to compensate the Participant for the
estimated federal income tax liability incurred by the Participant by reason of
such NSO exercise, based on the Participant's Estimated Tax Rate.
(4) ISO REIMBURSEMENTS. In the case of a Participant who exercises
an Incentive Stock Option ("ISO") to acquire Stock in order to satisfy the stock
ownership levels specified in the Guidelines, the Compensation Committee may
authorize additional cash payments (such payments being referred to as "ISO
Reimbursements") to such Participant to compensate the Participant for the
estimated federal tax liability incurred by the Participant by reason of such
ISO exercise.
(b) LIMITATIONS. Notwithstanding any contrary provision of this Plan,
unless otherwise approved by the Plan Administrative Committee, no Participant
shall be eligible to receive:
(1) Interest Payments with respect to any Stock Acquisition loan if
the proceeds of such loan are used to purchase Shares of Stock on the open
market or in a private sale, if at the time of purchase, the Participant has any
presently exercisable ISOs or NSOs "in the money" which remain unexercised; or
(2) NSO Reimbursements, if the Participant had, on the date of the
exercise of an NSO that is potentially eligible for a NSO Reimbursement under
this Plan, presently exercisable ISOs "in the money" which remain unexercised.
(c) MINIMUM COMPANY COMMITMENT. The Company shall provide in excess of
$25,000 of Stock Ownership Incentive Payments with respect to each Participant,
to the extent such Participant is eligible to receive such payments under this
Section 5.
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6. PARTICIPANT REPAYMENT OBLIGATIONS
(a) REPAYMENT OBLIGATIONS. The following payments shall be treated as
Repayment Obligations: (i) Interest Payments that are paid following the third
anniversary of any Stock Acquisition Loan and prior to the seventh anniversary
of such Stock Acquisition Loan; (ii) Interest Payments (including the gross ups)
that are paid prior to the third anniversary of such Stock Acquisition Loan, if
the Participant either terminates employment voluntarily or is terminated by the
Company for cause prior to such date; (iii) Discretionary Advances; (iv) ISO
Reimbursements; and (v) NSO Reimbursements, provided, the Compensation
Committee, in its sole and absolute discretion, may forgive any portion of a
Participant's NSO Reimbursement and may provide a gross up intended to offset
the tax liability resulting from such debt forgiveness.
(b) PROMISSORY NOTE. The Repayment Obligation of a Participant shall be
evidenced by a writing signed by the Participant and by the execution of a
negotiable promissory note. Any Repayment Obligation shall bear interest at a
rate, adjusted each calendar quarter, equal to the prime rate as published by
Bloomberg L.P. on the last business day of the preceding calendar quarter (or
the applicable federal rate, if higher) and shall be secured by a security
interest in the Participant's Stock acquired with the proceeds of the Stock
Acquisition Loan.
(c) ACCELERATION. Payment of a Repayment Obligation shall be required in
full on the earlier of (i) the date of death of the Participant, (ii) in the
event the Participant's employment with the Company is terminated for cause, the
date of such termination of employment, (iii) the second anniversary of the
Participant's termination of employment with the Company if such termination is
other than a termination by the Company for cause, (iv) in the case of Interest
Payments, the seventh anniversary of the corresponding Stock Acquisition Loan,
or (v) subject to the limitation of Subsection 6(d), the sale or other
disposition of any Stock if (I) such sale or disposition results in an
individual other than the Participant being treated as the beneficial owner
(within the meaning of Rule 13d-3 of the Exchange Act) of the Stock, and (II)
the Participant's Stock ownership level is below the participation level
designated in the Guidelines after such sale or disposition.
(d) LIMIT ON ACCELERATION. Notwithstanding the provisions of Subsection
(c) above, any acceleration of a Repayment Obligation on account of a sale or
other disposition pursuant to Subsection 6(c)(v) shall be limited to the lesser
of (i) any gain from such sale or disposition (net of any commissions) and (ii)
the Participant's Repayment Obligation at the time of the sale or disposition
multiplied by the ratio of the number of shares of Stock sold or disposed of by
the Participant to the total number of shares of Stock held by the Participant
prior to such sale or disposition. Any portion of a Repayment Obligation not
accelerated as a result of the limitation described in the preceding sentence
shall continue to be repayable in accordance with the provisions of Subsection
6(c).
As an example of the manner in which this provision is intended to
operate, assume a Participant ("A") acquires 1,000 shares of Stock with the
proceeds of a 7-year Stock Acquisition Loan. In Year 4, the Participant sells
700 shares (prior to achieving 100% of Participant's Guideline Amount (as
defined on Appendix A) or causing Participant to fall below his previously
achieved Guideline Amount) at a gain of $200 (net of commissions). At the time
of the sale, the Participant had a Repayment Obligation of $400 related to
interest on his Stock
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Acquisition Loan. Because after the Participant's sale of 700 shares he is below
100% of his Guideline Amount, the Participant is required to pay the Company
$200. Since the Participant's gain on the sale of the 700 shares (I.E., $200) is
less than the Participant's proportionate share of his Repayment Obligation
related to those 700 shares (I.E., $280 -- $400 x 700 shares/1,000 shares =
$280), the Participant must pay $200 to the Company pursuant to Subsection 6(d).
(e) EFFECTS OF TERMINATION OF EMPLOYMENT, CHANGE IN CONTROL.
(1) TERMINATION OF A REPAYMENT OBLIGATION IN THE EVENT OF A CHANGE
IN CONTROL. Notwithstanding anything to the contrary contained herein, a
Participant's Repayment Obligations shall terminate upon Participant's
termination of employment with the Company if such termination occurs within
twelve (12) months after a Change in Control of the Company and such termination
is (I) by the Company other than for cause, or (II) by the Participant for "good
reason". For the purposes of this paragraph, "cause" and "good reason" shall
have the meanings assigned in such Participant's Employment Agreement or Change
in Control Agreement with the Company applicable in such termination.
(2) GROSS UP FOR TERMINATION OF A REPAYMENT OBLIGATION. In the event
a Participant's Repayment Obligation is terminated under paragraph (1) above,
the Company shall pay the Participant a gross up amount equal to the product of
(i) the total amount of the Repayment Obligation(s) terminated, and (ii) the
Participant's Estimated Tax Rate.
(3) INELIGIBILITY FOR CONTINUED PAYMENTS UPON TERMINATION. Upon any
termination of the Participant's employment with the Company, the Company's
obligations to make further Stock Ownership Incentive Payments to such
Participant shall terminate immediately. For purposes of this Plan, employment
with a Subsidiary shall be deemed to be employment with the Company.
7. TERMINATION AND AMENDMENT
The Plan is completely voluntary on the part of the Company and neither
its existence nor its continuation shall be construed as creating any
contractual right to or obligation for its continued existence, nor shall the
existence of the Plan or participation therein be deemed to modify or otherwise
affect a Participant's continued employment with the Company. The Company
reserves the right at any time to modify or terminate the Plan by action
approved in writing by the Board or its delegatee, provided that such
modification or termination shall not affect the rights and obligations of
Participants and the Company under any then outstanding Stock Acquisition Loans.
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8. ADMINISTRATION OF THE PLAN
The Compensation Committee shall delegate to the Plan Administrative
Committee the power and authority to administer the Plan. Except as otherwise
provided herein and subject to the provisions of the Plan, the Plan
Administrative Committee shall have full and conclusive authority to interpret
the Plan; to determine the terms and provisions of any Repayment Obligation; and
to make all other determinations necessary or advisable for the proper day to
day administration of the Plan. The Plan Administrative Committee shall not have
the power or authority to determine the persons eligible to participate in the
Plan, materially increase any benefits offered under the Plan; to materially
increase the Company's financial commitments; or to prescribe, amend and rescind
rules and regulations relating to the Plan. The Plan Administrative Committee's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who are eligible to participate in the Plan. The Plan
Administrative Committee's decisions shall be final and binding on all
Participants.
9. MISCELLANEOUS
(a) The original version of the Interim Services Inc. 1997 Stock Purchase
Assistance Plan became effective on September 1, 1997. This Stock Purchase
Assistance Plan shall supersede the original version and become effective on
July 7, 2000.
(b) No benefit under the Plan shall in any manner be liable for or subject
to the debts, contracts, liabilities, engagements, or torts of the Participant
entitled to benefits under the Plan, and any attempt to anticipate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void.
(c) The titles and headings of the Sections of the Plan are placed herein
for the convenience of reference only, and in the case of any conflicts, the
text of the Plan, rather than the titles or headings, shall control.
(d) The masculine pronoun, wherever used herein, shall include the
feminine pronoun, and the singular shall include the plural, except where the
context requires otherwise.
(e) The provisions of the Plan shall be construed according to the laws of
the State of Florida, and the venue and jurisdiction of any suit with respect to
the Plan shall lie solely in the state or federal courts located in Broward
County, Florida.
