WESTAFF, INC.
AUTOMATIC STOCK OPTION AGREEMENT

RECITALS

        A.    The Corporation has implemented an automatic option grant program under the Plan pursuant to which eligible non-employee members of the Board automatically receive option grants at periodic intervals over their period of Board service in order to provide such individuals with a meaningful incentive to continue to serve a members of the Board.

        B.    Optionee is an eligible non-employee Board member, and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the automatic option grant to purchase shares of Common Stock under the Plan.

        C.    The option awarded under this Agreement is intended to be a Non-Statutory Option which does not meet the requirements of Code Section 422.

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

        NOW, THEREFORE, it is hereby agreed as follows:

          1.  Grant of Option.    The Corporation hereby grants to Optionee a Non-Statutory Option to purchase up to the total number of Shares at the Exercise Price per Share set forth in the Grant Notice, and subject to the terms and provisions of the Grant Notice, this Agreement and the Plan.

          2.  Option Term.    The option shall have a term of ten (10) years measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless earlier terminated in accordance with Sections 5, 6 or 7 of this Agreement.

          3.  Limited Transferability.    During Optionee's lifetime, the option may be exercised, only by Optionee, and is not transferable or assignable by Optionee for any reason other than (i) by will or by the laws of descent and distribution following Optionee's death, or (ii) in accordance with the terms of a Qualified Domestic Relations Order. The assigned portion of the option shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such Qualified Domestic Relations Order. The terms applicable to the assigned option shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Corporation may deem appropriate.

          4.  Exercisability.    The option shall be exercisable during its term in accordance with the Exercise Schedule set forth in the Grant Notice. Upon vesting, the option shall remain exercisable until the earlier of the Expiration Date or the termination of the option term under Sections 5, 6 or 7 of this Agreement.

          5.  Cessation of Board Service.    Should Optionee's service as a Board member cease while the option remains outstanding, then the option term set forth in Section 2 of this Agreement shall terminate (and the option shall cease to be outstanding) prior to the Expiration Date in accordance with the following provisions:

          (i)  Should Optionee cease to serve as Board member for any reason (other than death or Permanent Disability) while holding the option, then the period for exercising the option, to the extent exercisable, shall be reduced to a twelve (12)-month period (commencing with the date of such cessation of Board service), but in no event shall the option be exercisable at any time after the Expiration Date. Upon the earlier of (A) the expiration of such twelve (12)-month period or (B) the Expiration Date, the option shall terminate and cease to be exercisable with respect to any exercisable Shares for which the option has not been exercised.

        (ii)  Should Optionee die during the twelve (12)-month period following his or her cessation of Board service, then the personal representative of Optionee's estate or the person or persons to whom the option is transferred pursuant to Optionee's will or in accordance with the laws of descent and distribution shall have the right to exercise the option for any or all of the Shares in which Optionee is vested at the time of Optionee's cessation of Board service (less any Shares purchased by Optionee after such cessation of Board service but prior to death). Such right of exercise shall terminate, and the option shall accordingly cease to be exercisable for such vested Shares, upon the earlier of (i) the expiration of the twelve (12)-month period measured from the date of Optionee's cessation of Board service or (ii) the Expiration Date of the option term.


 

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