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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 24, 2007
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
_______________
Delaware
(State or other 36-2681268
jurisdiction of 0-25837 (IRS Employer
incorporation) (Commission File Number) Identification No.)
233 South Wacker Drive, Suite 4200, Chicago, IL 60606-6303
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 496-1200
N/A
(Former name or former address, if changed since last report.)
_______________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
/ / Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
/ / Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
/ / Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
/ / Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On May 24, 2007, the stockholders of Heidrick & Struggles
International, Inc. (the "Company") approved the 2007 Heidrick &
Struggles GlobalShare Program (the "GlobalShare Program") and the
Heidrick & Struggles Incentive Plan (the "Incentive Plan") at the
Company's Annual Meeting of Stockholders. The GlobalShare Program and
the Incentive Plan had previously been approved by the Board of
Directors of the Company on April 16, 2007, subject to approval of the
stockholders of the Company. The material terms of the GlobalShare
Program and the Incentive Plan are set forth in the Company's Notice
of Annual Meeting of Stockholders and Proxy Statement dated April 23,
2007, which descriptions are incorporated herein by reference. Such
descriptions do not purport to be complete and are qualified in their
entirety by reference to the full text of the GlobalShare Program and
the Incentive Plan, copies of which are filed as Exhibit 10.1 and
Exhibit 10.2, respectively, to this Form 8-K and are incorporated by
reference herein.
The Form of Non-Qualified Stock Option Agreement and Form of
Restricted Stock Unit Participation Agreement, each for use in the
granting of awards under the GlobalShare Program, are filed as Exhibit
10.3 and Exhibit 10.4, respectively, to this Form 8-K and are
incorporated by reference herein.
Additionally, on May 24, 2007, the Human Resources and Compensation
Committee of the Board (the "Committee") approved and adopted
amendments to the Company's Change in Control Plan (the "CIC Plan").
The material amendments are as follows:
1. The CIC Plan no longer bases eligibility for participation upon
annual approval by the Committee. Instead, participation is
limited to executive employees who are considered "officers"
pursuant to Section 16 of the Securities Exchange Act of 1934.
Current participants who do not meet this criteria will continue
to be covered by the CIC Plan until December 31, 2007.
2. The CIC Plan no longer requires annual approval by the Committee
of the specific benefits provided thereunder, but provides
generally for the following benefits to the eligible executive if
his or her employment is terminated by the Company without cause,
or if the executive terminates his or her employment with the
Company for good reason, within two years of a change in control
of the Company (or within six months prior to a change in control
if such termination is effected prior to, but in anticipation of,
the change in control):
* A lump-sum management bonus payment equal to the greater of
the executive's annual target management bonus or the
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average of the management bonuses paid with respect to the
preceding three years ("bonus amount"), prorated for the
portion of the year during which the executive was employed.
* A lump sum payment determined as follows: (i) for the Chief
Executive Officer, an amount equal to 2-1/2 times the sum of
his salary and bonus amount; (ii) for an Executive Vice
President or Regional Managing Partner, an amount equal to
two times the sum of his or her salary and bonus amount; and
(iii) for a Senior Vice President, an amount equal to one
times the sum of his or her salary and bonus amount.
* Immediate vesting of awards granted under the GlobalShare
Program.
* Reimbursement of reasonable legal fees incurred by the
executive in enforcing his or her rights under the CIC Plan
(except for a termination for cause).
* If severance benefits to the Chief Executive Officer, an
Executive Vice President or a Regional Managing Partner
exceed by 10% the maximum amount payable without triggering
excise tax liability under Internal Revenue Code Section
280G, a "gross up" payment to cover any excise and related
income tax liability incurred as a result. Severance
benefits to other participants will be limited under the CIC
Plan to the maximum amount payable without triggering excise
tax liability under Internal Revenue Code Section 280G.
The definitions of "cause", "good reason" and "change in control"
under the CIC Plan were not altered by the amendments.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit Number Description
-------------- -----------
10.1 2007 Heidrick & Struggles GlobalShare Program
10.2 Heidrick & Struggles Incentive Plan
10.3 Form of Non-Qualified Stock Option Agreement
10.4 Form of Restricted Stock Unit Participation
Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: June 8, 2007
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
By: /s/ K. Steven Blake
----------------------------------
K. Steven Blake, Executive Vice
President, General Counsel and
Secretary
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EXHIBIT 10.1
2007 HEIDRICK & STRUGGLES
GLOBALSHARE PROGRAM
1. PURPOSE OF THE PROGRAM
(a) The 1998 Heidrick & Struggles GlobalShare Program I
("Program I") and the 1998 Heidrick & Struggles GlobalShare
Program II ("Program II)" was last approved by stockholders
of Heidrick & Struggles International, Inc. (the "Company")
in 2002. Program I and Program II are hereby merged and
amended and restated as the 2007 Heidrick & Struggles
GlobalShare Program (the "Program"), effective as of May 24,
2007, subject to approval by stockholders of the Company at
the Company's annual meeting of stockholders to be held on
May 24, 2007. All references to the "Program" shall be to
Program I and Program II as merged and amended and restated
effective as of May 24, 2007, as described herein.
(b) The purpose of the Program is to aid the Company and its
Subsidiaries and Affiliates in securing and retaining
members of the Board, and certain employees of, and
independent contractors to, the Company, its Subsidiaries
and Affiliates and to motivate such individuals to exert
their best efforts on behalf of the Company, its
Subsidiaries and Affiliates by providing incentives through
the granting of Awards. The Company expects that it will
benefit from the added interest which such individuals will
have in the welfare of the Company as a result of their
proprietary interest in the Company's success.
2. DEFINITIONS
The following capitalized terms used in the Program have the
respective meanings set forth in this Section:
(a) ACT: The Securities Exchange Act of 1934, as amended, or
any successor thereto.
(b) AFFILIATE: Any entity in which the Company, directly or
indirectly, has at least a five percent ownership interest.
(c) AWARD: The grant of an Option, Stock Appreciation Right or
Other Stock-Based Award pursuant to such terms, conditions,
requirements and limitations as the Committee may establish
in order to fulfill the objectives of the Program.
(d) BENEFICIAL OWNER: As such term is defined in Rule 13d-3
under the Act (or any successor rule thereto).
(e) BOARD: The Board of Directors of the Company.
(f) CHANGE IN CONTROL: The occurrence of any of the following
events:
(i) any Person (other than the Company, any trustee or
other fiduciary holding securities under an employee
benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their
ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of securities
of the Company representing 30% or more of the combined
voting power of the Company's then outstanding
securities;
(ii) during any period of 24 months, individuals who, at the
beginning of such period, constitute the Board, and any
new director (other than (A) a director nominated by a
Person who has entered into an agreement with the
Company to effect a transaction described in Sections
2(f)(i), (iii) or (iv) hereof, (B) a director nominated
or proposed by any Person who has publicly announced or
advised the Company of an intention to take or to
consider taking actions (including, but not limited to,
an actual or threatened proxy contest) which, if
consummated, would constitute a Change in Control, or
(C) a director nominated by any Person who is the
Beneficial Owner, directly or indirectly, of securities
of the Company representing 10% or more of the combined
voting power of the Company's securities) whose
election by the Board or nomination for election by the
Company's stockholders was approved in advance by a
vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of
the period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute at least a majority thereof;
(iii) the consummation of any transaction or series of
transactions under which the Company is merged or
consolidated with any other company (other than a
merger or consolidation (A) which would result in the
voting securities of the Company outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted
into voting securities of the surviving entity or its
parent corporation) more than 66 2/3% of the combined
voting power of the voting securities of the Company or
such surviving entity or its parent corporation
outstanding immediately after such merger or
consolidation and (B) after which no Person holds 30%
or more of the combined voting power of the then
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outstanding securities of the Company or such surviving
entity or its parent corporation);
(iv) the consummation of a plan of complete liquidation of
the Company or of a sale or disposition by the Company
of all or substantially all of the Company's assets; or
(v) any other event occurs which the Board determines, in
its discretion, to be a Change in Control.
Notwithstanding the foregoing, a Change in Control
shall not occur with respect to a Participant by reason of
any event which would otherwise constitute a Change in
Control if, immediately after the occurrence of such event,
(x) the Company ceases to be subject to the requirement to
file reports pursuant to Section 13 or Section 15(d) of the
Act and no more than 50% of the then outstanding shares of
common stock of the Company or any acquiror or successor to
substantially all of the business of the Company is owned,
directly or indirectly, by any entity subject to such
requirements and (y) individuals (which may or may not
include the Participant) who were executive officers of the
Company immediately prior to the occurrence of such event,
own, directly or indirectly, on a fully diluted basis, (A)
25% or more of the then outstanding shares of common stock
of the Company or any acquiror or successor to substantially
all of the business of the Company or (B) 25% or more of the
combined voting power of the then outstanding voting
securities of the Company or any acquiror or successor to
substantially all of the business of the Company entitled to
vote generally in the election of directors.
(g) CODE: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
(h) COMMITTEE: The Human Resources and Compensation Committee
of the Board.
(i) COMPANY: Heidrick & Struggles International, Inc. a
Delaware corporation, and any successor thereto.
(j) EFFECTIVE DATE: The date on which the Program as amended
and restated takes effect, as defined pursuant to Section 21
of the Program.
(k) FAIR MARKET VALUE: As of any date, the per Share closing
price on such date as reported on the National Association
of Securities Dealers Automated Quotation System (or such
market in which such prices are regularly reported). If no
sale of Shares shall have been reported on the National
Association of Securities Dealer Automated Quotation System
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on such date, then the immediately preceding date on which
sales of the Shares have been so reported shall be used.
(l) INCENTIVE STOCK OPTION: An Option granted pursuant to
Section 7 of the Program that meets the requirements of
Section 422(b) of the Code.
(m) NON-QUALIFIED STOCK OPTION: An Option granted pursuant to
Section 7 of the Program that is not an Incentive Stock
Option.
(n) OPTION: A stock option granted pursuant to Section 7 of the
Program.
(o) OPTION PRICE: The purchase price per Share of an Option, as
determined pursuant to Section 7(b) of the Program.
(p) OTHER STOCK-BASED AWARDS: Awards granted pursuant to
Section 9 of the Program.
(q) PARTICIPANT: An individual who is selected by the Committee
to participate in the Program pursuant to Section 6 of the
Program.
(r) PERFORMANCE-BASED AWARDS: Certain Other Stock-Based Awards
granted in accordance with Section 10 of the Program.
(s) PERSON: As such term is defined in Section 3 of the Act or
as such term is used for purposes of Section 13(d) or 14(d)
of the Act (or any successor section thereto).
(t) PROGRAM: The 2007 Heidrick & Struggles GlobalShare Program,
as it may be amended from time to time.
(u) SHARE: A share of common stock, par value $0.01 per Share,
of the Company.
(v) STOCK APPRECIATION RIGHT: A right granted pursuant to
Section 8 of the Program.
(w) SUBSIDIARY: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. SHARES SUBJECT TO THE PROGRAM
(a) TOTAL NUMBER OF SHARES. The total number of Shares
authorized or reserved for issuance with respect to Awards
granted under the Program on or after the Effective Date,
subject to adjustments upon certain events described in
Section 12 of the Program, shall be 2,000,000 Shares (such
number to include the number of Shares not subject to Awards
and remaining available for issuance under Program I and
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Program II immediately prior to the Effective Date). Such
Shares may consist, in whole or in part, of authorized and
unissued Shares, treasury Shares, or Shares which are
authorized and issued and have been acquired by or on behalf
of the Company or the Program.
(b) AVAILABLE SHARES. The issuance of Shares shall reduce the
total number of Shares available under the Program. Shares
subject to Awards which are forfeited, terminated, or expire
unexercised may be granted again under the Program. The
number of Shares delivered by a Participant or withheld by
the Company on behalf of any such Participant as full or
partial payment of an Award, including the exercise price of
an Option or of any required withholding taxes, shall not be
available for issuance pursuant to subsequent Awards, and
shall count towards the aggregate number of Shares that have
been issued under the Program.
4. AWARD LIMITATIONS
(a) SHARE AWARD LIMITATIONS. The aggregate maximum number of
Shares with respect to which Options and/or Stock
Appreciation Rights may be granted under the Program during
a calendar year to any Participant who is or may be a
"covered employee" as defined in Section 162(m) of the Code
shall be 200,000.
(b) PERFORMANCE-BASED AWARDS. The maximum number of Shares that
may be used for Awards other than Stock Options and Stock
Appreciation Rights that are intended to be "performance
based" in accordance with Section 162(m) of the Code that
may be granted during any calendar year to any Participant
who is or may become a "covered employee" as defined in
Section 162(m) of the Code shall be 200,000.
(c) INCENTIVE STOCK OPTIONS. The total number of Shares with
respect to which Incentive Stock Options may be granted
shall not exceed 2,000,000.
5. ADMINISTRATION
The Program shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee
thereof consisting solely of at least two individuals who are each
"non-employee directors" within the meaning of Rule 16b-3 under the
Act and "outside directors" within the meaning of Section 162(m) of
the Code. The Committee is authorized to interpret the Program, to
establish, amend and rescind any rules and regulations relating to the
Program, and to make any other determinations that it deems necessary
or desirable for the administration of the Program. The Committee may
correct any defect or supply any omission or reconcile any
inconsistency in the Program in the manner and to the extent the
5
Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administration of the Program, as described
herein, shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned (including, but
not limited to, Participants and their beneficiaries or successors).
6. ELIGIBILITY
Participants shall consist of (a) all members of the Board (including
employee and non-employee directors), and (b) the employees of, and
independent contractors to, the Company and its Subsidiaries and
Affiliates who the Committee may designate in its sole discretion from
time to time as eligible to be granted Awards under the Program. The
Committee shall determine, in its sole discretion, the date as of
which Awards will be granted to Participants and the number of Shares
with respect to which Awards will be granted to each Participant.
7. OPTIONS
Options granted under the Program shall be, as determined by the
Committee, Non-Qualified Stock Options or Incentive Stock Options, as
outlined and evidenced by the related Award agreements, and shall be
subject to the following terms and conditions and to such other terms
and conditions as the Committee shall determine:
(a) TYPE OF OPTION. Options granted to non-employee directors
or independent contractors shall be Non-Qualified Stock
Options. Options granted under the Program to employees
shall be Non-Qualified Stock Options, unless otherwise
expressly provided at the time of grant.
(b) OPTION PRICE. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100%
of the Fair Market Value of a Share on the date the Option
is granted.
(c) EXERCISABILITY. Options granted under the Program shall be
exercisable at such time and upon such terms and conditions
as may be determined by the Committee, provided that each
Option shall become exercisable not earlier than (i) 100% on
the third anniversary of the date of grant, or (ii) 33 1/3%
on each of the three succeeding anniversaries of the date of
grant. Notwithstanding the foregoing, the Committee shall
have the discretion to accelerate the date as of which any
Option shall become exercisable in the event of the
Participant's termination of employment or service with the
Company, without cause (as determined by the Committee in
its sole discretion). In no event shall an Option granted
under the Program be exercisable more than 10 years after
the date it is granted.
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(d) EXERCISE OF OPTIONS. Except as otherwise provided in the
Program or in an Award agreement, an Option may be exercised
for all or any portion of the Shares for which it is then
exercisable. The exercise date of an Option shall be the
later of the date a notice of exercise is received by the
Company and, if applicable, (i) the date payment is received
by the Company under (A), (B) or (C) below, or (ii) the date
irrevocable instructions are delivered to a broker for sale
of such Shares, in accordance with (D) below. The purchase
price for the Shares as to which an Option is exercised
shall be paid to the Company in full at the time of
exercise, in one or more of the following alternatives as
made available by the Committee in its sole discretion: (A)
in cash, (B) in Shares having a Fair Market Value equal to
the aggregate Option Price for the Shares being purchased,
(C) partly in cash and partly in such Shares, (D) through
the delivery of irrevocable instructions to a broker to
deliver promptly to the Company an amount equal to the
aggregate Option Price for the Shares being purchased, or
(E) by directing the Company to withhold such number of
Shares otherwise issuable in connection with the exercise of
the Option having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased. No Participant
shall have any rights to dividends or other rights of a
stockholder with respect to Shares subject to an Option
until the Participant has given written notice of exercise
of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by
the Committee pursuant to the Program.
(e) NO RELOAD OPTIONS PERMITTED. No grant of an Option shall
include a "reload" Option, pursuant to which a Participant
who exercises an Option and satisfies all or part of the
Option Price with Shares acquired upon exercise of the
Option is granted an additional Option to acquire the same
number of Shares as is used by the Participant to pay for
the original Option.
(f) INCENTIVE STOCK OPTIONS. In addition to the foregoing, each
Incentive Stock Option shall be subject to the following
specific rules:
(i) The aggregate Fair Market Value (determined at the time
such Option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year
(under all incentive stock option plans of the Company
and its Subsidiaries) shall not exceed $100,000. If the
aggregate Fair Market Value (determined at the time of
grant) of the Shares subject to an Incentive Stock
Option which first becomes exercisable in any calendar
year exceeds the limitation of this Section 7(f), so
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much of the Option that does not exceed the applicable
dollar limit shall be an Incentive Stock Option and the
remainder shall be a Non-Qualified Stock Option; but in
all other respects, the original Award agreement shall
remain in full force and effect.
(ii) Notwithstanding anything herein to the contrary, if an
Incentive Stock Option is granted to an employee who
owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the
Company (or its parent or Subsidiaries): (A) the
purchase price of each Share subject to the Incentive
Stock Option shall be not less than 110% of the Fair
Market Value of the Shares on the date the Incentive
Stock Option is granted; and (B) the Incentive Stock
Option shall expire, and all rights to purchase Shares
thereunder shall expire, no later than the fifth
anniversary of the date the Incentive Stock Option was
granted.
8. STOCK APPRECIATION RIGHTS
The Committee also may grant a Stock Appreciation Right
independent of an Option, as outlined and evidenced by the related
Award agreement, and shall be subject to the following terms and
conditions and to such other terms and conditions as the Committee
shall determine:
(a) TERMS AND CONDITIONS. The exercise price per Share of a
Stock Appreciation Right shall be an amount determined by
the Committee but in no event shall such amount be less than
the Fair Market Value of a Share on the date the Stock
Appreciation Right is granted. Each Stock Appreciation Right
shall entitle a Participant upon exercise to an amount equal
to (i) the Fair Market Value on the exercise date of one
Share minus the exercise price of the Stock Appreciation
Right, times (ii) the number of Shares covered by the Stock
Appreciation Right. Stock Appreciation Rights may be
exercised from time to time upon actual receipt by the
Company of written notice of exercise stating the number of
Shares with respect to which the Stock Appreciation Right is
being exercised The date a notice of exercise is received by
the Company shall be the exercise date. Payment shall be
made to the Participant in Shares or in cash, or partly in
Shares and partly in cash, valued at such Fair Market Value,
all as shall be determined by the Committee. No fractional
Shares will be issued in payment for Stock Appreciation
Rights, but instead cash will be paid for a fraction or, if
the Committee should so determine, the number of Shares will
be rounded downward to the next whole Share.
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(b) LIMITATIONS. The Committee may impose, in its discretion,
such conditions upon the exercisability of Stock
Appreciation Rights as it may deem fit, provided that each
Stock Appreciation Right shall become exercisable not
earlier than (i) 100% on the third anniversary of the date
of grant, or (ii) 33 1/3% on each of the three succeeding
anniversaries of the date of grant. Notwithstanding the
foregoing, the Committee shall have the discretion to
accelerate the date as of which any Stock Appreciation Right
shall become exercisable in the event of the Participant's
termination of employment or service with the Company,
without cause (as determined by the Committee in its sole
discretion).
9. OTHER STOCK-BASED AWARDS
The Committee, in its sole discretion, may grant Awards of
Shares, Awards of restricted Shares and Awards that are valued in
whole or in part by reference to, or are otherwise based on the Fair
Market Value of, Shares ("Other Stock-Based Awards") as outlined and
evidenced by the related Award agreement and shall be subject to the
following terms and conditions and to such other terms and conditions
as the Committee shall determine:
(a) TERMS AND CONDITIONS. Such Other Stock-Based Awards shall
be in such form, and dependent on such conditions, as the
Committee shall determine, including, without limitation,
the right to receive one or more Shares (or the equivalent
cash value of such Shares) upon the completion of a
specified period of service, the occurrence of an event
and/or the attainment of performance objectives. Other
Stock-Based Awards may be granted alone or in addition to
any other Awards granted under the Program. Subject to the
provisions of the Program, the Committee shall determine to
whom and when Other Stock-Based Awards will be made, the
number of Shares to be awarded under (or otherwise related
to) such Other Stock-Based Awards, and whether such Other
Stock-Based Awards shall be settled in cash, Shares or a
combination of cash and Shares.
(b) LIMITATIONS. The Committee may impose, in its discretion,
such conditions upon vesting as it may deem fit, provided
that (i) Other Stock-Based Awards which are conditioned on
continued service or the occurrence of an event shall become
vested or exercisable not earlier than (A) 100% on the third
anniversary of the date of grant, or (B) 33 % on each of the
three succeeding anniversaries of the date of grant, and
(ii) Other Stock-Based Awards which are conditioned solely
or in part on the attainment of performance objectives shall
become vested or exercisable not earlier than the first
anniversary of the date of grant. Notwithstanding the
foregoing, the Committee shall have the discretion to
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accelerate the date as of which any Other Stock-Based Awards
shall become vested or exercisable in the event of the
Participant's termination of employment or service with the
Company, without cause (as determined by the Committee in
its sole discretion).
10. PERFORMANCE-BASED AWARDS
Notwithstanding anything to the contrary herein, certain Other
Stock-Based Awards granted under Section 9 may be granted on the basis
of performance of the Company ("Performance-Based Awards"), and
designated as Performance-Based Awards; provided, however, that the
Committee may grant other Awards that are not intended to be
Performance-Based Awards (even though such Awards are subject to the
attainment of specified performance goals) and not designated as such.
A Participant's Performance-Based Award shall be determined based on
the attainment of written performance goals approved by the Committee
for a performance period established by the Committee (a) while the
outcome for that performance period is substantially uncertain and (b)
no more than 90 days after the commencement of the performance period
to which the performance goal relates or, if less, the number of days
which is equal to 25% of the relevant performance period. The
performance goals, which must be objective, shall be based upon one or
more of the following criteria: (i) consolidated earnings before or
after taxes (including earnings before interest, taxes, depreciation
and amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on
stockholders' equity; (vii) expense management; (viii) return on
investment; (ix) improvements in capital structure; (x) profits or
profitability, including of an identifiable business unit or product;
(xi) maintenance or improvement of profit margins; (xii) price per
Share; (xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi)
cash flow; (xvii) working capital and (xviii) return on assets. The
foregoing criteria may relate to the Company, one or more of its
Subsidiaries or Affiliates or one or more of its divisions or units,
or any combination of the foregoing, and may be applied on an absolute
basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall
determine. In addition, to the degree consistent with Section 162(m)
of the Code, the performance goals may be calculated without regard to
extraordinary items. The Committee shall determine whether, with
respect to a performance period, the applicable performance goals have
been met with respect to a given Participant and, if they have, to so
certify and ascertain the amount of the applicable Performance-Based
Award. No Performance-Based Awards will be paid for such performance
period until such certification is made by the Committee. The amount
of the Performance-Based Award actually paid to a given Participant
may be less than the amount determined by the applicable performance
goal formula, at the discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee for a performance
period shall be paid to the Participant at such time as determined by
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the Committee in its sole discretion after the end of such performance
period.
11. TAX WITHHOLDING
A Participant shall pay to the Company an amount equal to the
taxes required by any government to be withheld or otherwise deducted
and paid by the Company as a result of the exercise by the Participant
of any Award or the delivery to the Participant of any cash or Shares
pursuant to any Award. Shares shall not be delivered to the
Participant until such time as such payment has been made. The
Committee may, in its discretion, permit the Participant to pay all or
a portion of the withholding taxes in one or more of the following
alternatives: (a) in cash, (b) in Shares having a Fair Market Value
equal to the amount required to be withheld, (c) partly in cash and
partly in such Shares, (d) through the delivery of irrevocable
instructions to a broker to deliver promptly to the Company an amount
equal to the amount required to be withheld, or (e) by directing the
Company to withhold such number of Shares otherwise issuable in
connection with the Award having a Fair Market Value equal to the
amount required to be withheld. However, in no event will the amount
of Shares withheld exceed the amount necessary to satisfy the required
minimum statutory withholding. The Company may also withhold any such
withholding taxes from any cash payments made hereunder.
12. ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding any other provisions in the Program to the
contrary, the following provisions shall apply to all Awards granted
under the Program:
(a) GENERALLY. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share
dividend or split, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of Shares
or other corporate exchange, or any distribution to
stockholders of Shares other than regular cash dividends, or
in the event any of the foregoing events or any similar
event affects the Company, any Affiliate or any business
unit, or the financial statements of the Company or any
Affiliate or the bases for the computation of any Award, the
Committee in its sole discretion and without liability to
any Person may make such substitution or adjustment, if any,
as it deems to be equitable, as to (i) the number or kind of
Shares or other securities issued or reserved for issuance
pursuant to the Program or pursuant to outstanding Awards,
(ii) the limits on Awards set forth in Sections 3 and 4
hereof, (iii) the Option Price and/or (iv) any other
affected terms of such Awards (including, without
limitation, the amount payable thereunder or any performance
objectives set with respect thereto).
11
(b) CHANGE IN CONTROL. Except as otherwise provided in an Award
agreement, in the event of a Change in Control: (i) any
Award carrying a right to exercise that was not previously
exercisable and vested shall become fully exercisable and
vested as of the time of the Change in Control; (ii) the
restrictions, deferral of settlement, and forfeiture
conditions applicable to any other Award granted under the
Program shall lapse and such Awards shall be deemed fully
vested as of the time of the Change in Control; and (iii)
with respect to any Award subject to achievement of
performance objectives and conditions under the Program,
such performance objectives and other conditions will be
deemed to be met at target, unless otherwise provided by the
Committee, as of the time of the Change in Control.
Notwithstanding anything herein to the contrary, the
Committee in its sole discretion and without liability to
any Person may take such actions, if any, as it deems
necessary or desirable with respect to any Award (including,
without limitation, (x) the payment of a cash amount in
exchange for the cancellation of an Award and/or (y) the
requiring of the issuance of substitute Awards that will
substantially preserve the value, rights and benefits of any
affected Awards previously granted hereunder) as of the time
of the Change in Control. Any such determination by the
Committee shall be final and binding upon the Company and
all Participants.
13. CERTAIN SECURITIES AND TAX LAW MATTERS
(a) Securities Laws.
(i) The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of 1933, as
amended (or any successor statute) of any Shares to be
issued hereunder or to effect similar compliance under
the laws of any state or other jurisdiction.
Notwithstanding anything herein to the contrary, the
Company shall not be obligated to cause to be issued or
delivered any certificates evidencing Shares pursuant
to the Program unless and until the Company is advised
by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws,
regulations of governmental authority and the
requirements of any securities exchange on which Shares
are traded. The Committee may require, as a condition
of the issuance and delivery of certificates evidencing
Shares pursuant to the terms hereof, that the recipient
of such Shares make such covenants, agreements and
representations, and that such certificates bear such
legends, as the Committee, in its sole discretion,
deems necessary or desirable.
12
(ii) The exercise of any Option granted hereunder shall only
be effective at such time as counsel to the Company
shall have determined that the issuance and delivery of
Shares pursuant to such exercise is in compliance with
all applicable laws, regulations of governmental
authority and the requirements of any securities
exchange on which Shares are traded. The Company may,
in its sole discretion, defer the effectiveness of any
exercise of an Option granted hereunder in order to
allow the issuance of Shares pursuant thereto to be
made pursuant to registration or an exemption from
registration or other methods for compliance available
under federal or state securities laws. The Company
shall inform the Participant in writing of its decision
to defer the effectiveness of the exercise of an Option
granted hereunder. During the period that the
effectiveness of the exercise of an Option has been
deferred, the Participant may, by written notice,
withdraw such exercise and obtain the refund or any
amount paid with respect thereto.
(b) SECTION 162(M). The Committee may modify the terms of any
Award (including by means of accelerated or deferred
payouts) relating to compensation that does not constitute
"qualified performance-based compensation" within the
meaning of Section 162(m) of the Code or otherwise does not
qualify for an exemption from Section 162(m) of the Code in
order to permit the deductibility of such compensation under
Section 162(m) of the Code by the Company.
(c) DEFERRAL OF AWARDS.
(i) With respect to any Award that is subject to Section
409A of the Code, the Committee, in its discretion, may
defer the payment of any such Award to the extent it
determines that such deferral is necessary in order to
avoid a limitation on the deduction of that Award under
Section 162(m) of the Code. Any Award deferred under
the preceding sentence shall be paid upon the earlier
of (A) the first year in which the Company reasonably
anticipates that payment of such Award would not result
in a limitation of a deduction with respect to such
Award under Section 162(m) of the Code, or (B) the year
in which the Participant's employment with the Company
or any Subsidiary or Affiliate is terminated.
(ii) With respect to any Award that is subject to Section
409A of the Code, the Committee, in its discretion, may
defer the payment of any such Award to the extent: (A)
it determines that such deferral is necessary to
prevent a default under the terms of any financing or
similar agreement(s) between the Company and a lender
13
or group of lenders or if the Company is already in
default under such an agreement(s) and unable to secure
a waiver to make sure payment, or (B) it determines
that such deferral is necessary to prevent a violation
of federal securities laws or other applicable laws.
Any Award deferred under the preceding sentence shall
be paid at the earliest date at which the Company
reasonably anticipates that payment of the Award will
not cause a default, such default would not reasonably
cause material harm to the Company, or the payment of
the Award would not result in a violation of federal
securities law or other applicable laws.
14. NO RIGHT TO CONTINUED RELATIONSHIP; NO OBLIGATION OF UNIFORM
TREATMENT
The granting of an Award under the Program shall impose no
obligation on the Company or any Subsidiary or Affiliate to continue
the employment of or relationship between it and any Participant and
shall not lessen or affect the Company's, Subsidiary's or Affiliate's
right to terminate the employment of or its relationship with such
Participant. No Participant, officer, employee or director shall have
any claim to be granted any Award under the Program, and there is no
obligation for uniformity of treatment of Participants or any other
Persons.
15. SUCCESSORS AND ASSIGNS
The Program shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, any
beneficiary of such Participant, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver
or trustee in bankruptcy or representative of the Participant's
creditors.
16. NONTRANSFERABILITY OF AWARDS
Except to the extent provided by the Committee, an Award shall
not be transferable or assignable by the Participant otherwise than by
will or by the laws of descent and distribution. Any Awards
exercisable or Shares deliverable after a Participant's death shall be
exercisable by or delivered to a beneficiary as designated in writing
by the Participant. If no beneficiary is so designated, such Award
shall be exercisable by or such Shares will be delivered to the
Participant's estate. The Participant may change his or her designated
beneficiary under this Program by filing with the Committee written
notice of such change.
17. AMENDMENT OR TERMINATION
(a) AMENDMENT OR TERMINATION OF PROGRAM. The Board may amend,
alter or discontinue the Program, without the approval of
14
the stockholders of the Company, unless (i) such approval is
required by applicable law, regulation or rule of any stock
exchange on which the Shares are listed or (ii) the
amendment would result in an increase in the number of
Shares available for issuance under the Program, an
expansion of the types of Awards under the Program, or a
decrease in or a waiver of the minimum vesting and
exercisability limitations applicable to Awards. No
amendment or termination of the Program shall, without the
consent of a Participant, materially impair the rights of
any Participant under any Award granted to such Participant
under the Program, unless necessary to meet the requirements
of any applicable law, regulation or rule of any stock
exchange on which the Shares are listed. Notwithstanding
anything to the contrary herein, the Board may not amend,
alter or discontinue the provisions relating to Section
12(b) of the Program after the occurrence of a Change in
Control.
(b) AMENDMENT OF AWARD AGREEMENTS. The Committee shall have the
authority to amend any Award agreement at any time; provided
that no such amendment shall materially impair the rights of
any Participant under any Award agreement, unless necessary
to meet the requirements of any applicable law, regulation
or rules of any stock exchange on which the Shares are
listed.
(c) NO REPRICING OF OPTIONS. Notwithstanding the foregoing,
there shall be no amendment to the Program or any Award
agreement that results in the repricing of Options.
18. INTERNATIONAL PARTICIPANTS
With respect to Participants who reside or work outside the
United States of America and who are not (and who are not expected to
be) "covered employees" within the meaning of Section 162(m) of the
Code, the Committee may, in its sole discretion, amend the terms of
the Program or Award agreements with respect to such Participants in
order to conform such terms with the requirements of local law.
19. COMPLIANCE WITH CODE SECTION 409A.
Unless otherwise provided by the Committee, to the extent that
the Committee determines that any Award granted under the Program is
subject to Section 409A of the Code, the applicable Award agreements
shall incorporate the terms and conditions necessary to avoid the
consequences specified in Section 409A(a)(1) of the Code. To the
extent applicable, the Program and Award agreements shall be
interpreted and construed in compliance with Section 409A of the Code
and Department of Treasury regulations and other interpretive guidance
issued thereunder. Notwithstanding any provision of the Program to the
contrary, in the event that the Committee determines that any Award
15
may be subject to Section 409A of the Code, the Committee may, without
the consent of Participants, including the affected Participant, adopt
such amendments to the Program and the applicable Award agreements or
adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions,
that the Committee determines are necessary or appropriate to (a)
exempt the Award from Section 409A of the Code or (b) comply with the
requirements of Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder.
20. CHOICE OF LAW
The Program shall be governed by and construed in accordance with
the laws of the State of Illinois applicable to contracts made and to
be performed in the State of Illinois.
21. EFFECTIVE DATE AND TERM OF PROGRAM
(a) EFFECTIVE DATE. The Program as amended and restated has
been adopted by the Board, and is effective as of May 24,
2007, subject to the approval of the Program by the
stockholders of the Company at the Company's annual meeting
of stockholders held on May 24, 2007 and any adjournment or
postponement thereof. In the event the Program is not
approved by stockholders at the Company's 2007 annual
meeting, (i) the Program as amended and restated shall have
no effect; and (ii) the terms of Program I and Program II as
in effect immediately prior to the amendment and restatement
of the Program shall remain in effect.
(b) No new Awards may be granted under the Program after the
fourth anniversary of the Effective Date as described in
Section 21(a) hereof, although Awards granted prior to such
date may extend beyond that date. Awards granted prior to
the Effective Date shall continue to be subject to the terms
and conditions of Program I and Program II as applicable and
as in effect prior to the Effective Date.
16
EXHIBIT 10.2
HEIDRICK & STRUGGLES
1. PURPOSE OF THE PLAN
The purpose of the Heidrick & Struggles Incentive Plan is to
provide incentives awards to key employees of, and independent
contractors to, the Company, its Subsidiaries and Affiliates to
retain, reward, and motivate such individuals for exerting their best
efforts and achieving specific performance goals on behalf of the
Company, its Subsidiaries and Affiliates. The Company believes that it
will benefit from providing incentives that align such individuals'
interests with the Company's key business strategy and objectives of
achieving long-term revenue and operating income growth.
2. DEFINITIONS
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) AFFILIATE: Any entity in which the Company, directly or
indirectly, has at least a five percent ownership interest.
(b) BOARD: The Board of Directors of the Company.
(c) CHANGE IN CONTROL: As such term is defined in the
GlobalShare Program.
(d) CODE: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
(e) COMMITTEE: The Human Resources and Compensation Committee
of the Board.
(f) COMPANY: Heidrick & Struggles International, Inc. a
Delaware corporation, and any successor thereto.
(g) EFFECTIVE DATE: January 1, 2007, subject to approval by the
Company's stockholders at the Company's annual meeting of
stockholders held on May 24, 2007, and any adjournment or
postponement thereof. The Plan shall remain in effect until
terminated by the Board.
(h) GLOBALSHARE PROGRAM. The 1998 Heidrick & Struggles
GlobalShare Program I or the 1998 Heidrick & Struggles
GlobalShare Program II, as applicable, and any successor
program thereto.
(i) PARTICIPANT: An individual who is selected by the Committee
to participate in the Plan pursuant to Section 4 of the
Plan.
(j) PLAN: The Heidrick & Struggles Incentive Plan, as it may be
amended from time to time.
(k) SUBSIDIARY: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. ADMINISTRATION
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee
thereof consisting solely of at least two individuals who are "outside
directors" within the meaning of Section 162(m) of the Code. The
Committee is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make
any other determinations that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent the Committee deems necessary or desirable.
Any decision of the Committee in the interpretation and administration
of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all
parties concerned (including, but not limited to, Participants and
their beneficiaries or successors).
4. ELIGIBILITY
Participants shall consist of the employees of, and independent
contractors to, the Company and its Subsidiaries and Affiliates who
the Committee may designate in its sole discretion from time to time
as eligible to participate in the Plan. The Committee shall determine,
in its sole discretion, (i) the performance periods and the
performance goals pursuant to which incentive awards will be made,
(ii) final incentive award amounts to be paid to Participants, and
(iii) the form of compensation in which such incentive awards are to
be paid. The Committee shall have the discretion to terminate a
Participant's participation in the Plan at any time, in which case no
incentive award may be paid.
5. PERFORMANCE CRITERIA
(a) ESTABLISHMENT OF PERFORMANCE PERIOD AND PERFORMANCE GOALS.
A Participant's incentive award shall be determined based on
the attainment of written performance goals approved by the
Committee for a performance period established by the
Committee (i) while the outcome for that performance period
is substantially uncertain and (ii) no later than 25% after
the start date of such performance period.
(b) PERFORMANCE CRITERIA. The performance goals, which must be
objective, shall be based upon one or more of the following
criteria: (i) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and
2
amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on
stockholders' equity; (vii) expense management; (viii)
return on investment; (ix) improvements in capital
structure; (x) profits or profitability, including of an
identifiable business unit or product; (xi) maintenance or
improvement of profit margins; (xii) price per Share; (xiii)
market share; (xiv) revenues or sales; (xv) costs; (xvi)
cash flow; (xvii) working capital and (xviii) return on
assets. The foregoing criteria may relate to the Company,
one or more of its Subsidiaries or Affiliates or one or more
of its divisions or units, or any combination of the
foregoing, and may be applied on an absolute basis and/or be
relative to one or more peer group companies or indices, or
any combination thereof, all as the Committee shall
determine. In addition, to the degree consistent with
Section 162(m) of the Code, the performance goals may be
calculated without regard to extraordinary items.
6. AWARD DETERMINATION AND PAYMENT
(a) DETERMINATION. As soon as practicable following the
completion of each performance period, the Committee shall
determine whether, and to what extent, the applicable
performance goals have been met with respect to a given
Participant and shall certify and ascertain the amount of
the applicable incentive award payable. No incentive award
will be paid for such performance period until such
certification is made by the Committee. The amount of the
incentive award actually paid to a given Participant may be
more or less than the amount determined by the applicable
performance goal formula, at the discretion of the
Committee; provided, however, that the amount of the
incentive actually paid to a given Participant who is a
"covered employee" under Section 162(m) of the Code for the
calendar year in which the payment is made shall not be more
than the amount determined by the applicable performance
goal formula.
(b) TIME OF PAYMENT. The amount of the incentive award
determined by the Committee for a performance period shall
be paid to the Participant at such time as determined by the
Committee in its sole discretion after the end of such
performance period, but in no event later than March 15 of
the calendar year following the calendar year in which the
performance period ends.
(c) FORM OF PAYMENT. The Committee in its sole discretion shall
determine the portion of each incentive award to be paid in
cash and the portion of each incentive award, if any, to be
paid in the form of equity. Any equity compensation will be
3
awarded under, and shall be subject to, the GlobalShare
Program.
(d) DEFERRAL. A Participant may elect to defer all or a portion
of the incentive award otherwise payable to him or her in
cash into the Heidrick & Struggles Deferred Compensation
Plan, in accordance with the terms of such Deferred
Compensation Plan.
(e) MAXIMUM AWARD. In no event shall any Participant who is a
"covered employee" under Section 162(m) of the Code for the
calendar year in which the award is paid receive an
incentive award under the Plan that exceeds $5,000,000 with
respect to each calendar year of the performance period to
which the award relates.
7. TAX WITHHOLDING
The Company shall have the right to deduct from the cash portion
of any incentive award payment the amount of any taxes required by any
law to be withheld with respect to such payment.
8. CHANGE IN CONTROL
In the event of a Change in Control, the Committee shall have the
right in its sole discretion to make any adjustments to the
performance goals and incentive awards it deems appropriate, and to
provide for an immediate payment of any incentive awards.
9. NO RIGHT TO CONTINUED RELATIONSHIP; NO OBLIGATION OF UNIFORM
TREATMENT
The granting of an incentive award under the Plan shall impose no
obligation on the Company or any Subsidiary or Affiliate to continue
the employment or service of any Participant and shall not lessen or
affect the Company's, Subsidiary's or Affiliate's right to terminate
the employment or service of such Participant. No Participant,
employee or independent contractor shall have any claim to be granted
any incentive award under the Plan, and there is no obligation for
uniformity of treatment of Participants or any other persons.
10. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, any
beneficiary of such Participant, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver
or trustee in bankruptcy or representative of the Participant's
creditors.
4
11. AMENDMENT OR TERMINATION OF PLAN
The Board may amend, alter or discontinue the Plan, without the
approval of the stockholders of the Company, unless such approval is
required by applicable law, regulation or rule of any stock exchange
on which the Shares are listed. No amendment or termination of the
Plan shall, without the consent of a Participant, reduce the right of
a Participant to a payment or distribution to which the Participant is
entitled by reason of an outstanding incentive award.
12. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with
the laws of the State of Illinois applicable to contracts made and to
be performed in the State of Illinois.
5
EXHIBIT 10.3
NON-QUALIFIED STOCK OPTION PARTICIPANT NAME
GRANT AGREEMENT
This Non-Qualified Stock Option Grant Agreement (the "Agreement")
is dated as of this ____ day of __________, 20___ and sets forth the
terms and conditions of the Award described below made by Heidrick &
Struggles International, Inc. (the "Company") to _______________ (the
"Participant"), pursuant to the 2007 Heidrick & Struggles GlobalShare
Program (the "Program").
As of _______________, 20___ (the "Grant Date"), the Company has
granted an option (the "Option") to purchase ____ shares of the
Company's common stock, par value $.01 (the "Shares"), at $_____ per
Share (the "Option Price"). This Option is granted pursuant to the
Program and is governed by the terms and conditions of the Program.
All defined terms used herein, unless specifically defined in this
Agreement, have the meanings assigned to them in the Program. The
Participant agrees to be bound by all terms and conditions of the
Agreement and the Program and has received and reviewed a copy of the
Program and the Prospectus for the Program dated _______________,
20___.
The Option granted under this Agreement shall not become valid or
enforceable unless and until the Participant executes the Agreement
and it is accepted by the Company. By the Participant's signature and
the Company's signature below, the Participant and the Company agree
that this constitutes the signature page of the Agreement.
Participant further agrees that the Option is granted under and
governed by the terms and conditions of the Agreement and the Program.
Agreements that are not signed and returned are considered null and
void.
IN WITNESS WHEREOF, the parties hereto have duly executed the
Agreement as of the date first set forth above.
----------------------------
Name: PARTICIPANT NAME
Heidrick & Struggles International, Inc.
By: ________________________
Name:
Title: Secretary
NOW, THEREFORE, in consideration of the agreements of the
Participant herein provided and pursuant to the Program, the parties
agree as follows:
1. DEFINITIONS. All capitalized terms used herein, unless
specifically defined herein, shall have the same meanings as
established in the Program.
2. PARTICIPATION. Pursuant to the Program and contingent upon
the execution of the Agreement, the Company hereby grants to the
Participant an Option to purchase ____ Shares at $_____ per Share
subject to the terms and conditions herein. As a material condition
and inducement to the Company's grant of the Option to the
Participant, the Participant agrees that he or she has received and
reviewed the Program and further agrees to be bound by all of the
terms and conditions of the Agreement and the Program, as may be
amended by the Company from time to time.
3. VESTING AND EXERCISABILITY OF OPTIONS.
(a) Subject to Sections 3(b), (c) and (d) below, the Option
granted under the Agreement shall vest in accordance
with the schedule set forth below; provided, the
Participant has been in Continuous Service through each
vesting date. For purposes of the Agreement,
"Continuous Service" shall mean the Participant's
service with the Company or any Subsidiary or Affiliate
as an employee, or the Participant's service as a
member of the Board of Directors of the Company, has
not been interrupted or terminated, and shall include
any period during which the Participant is on an
approved leave of absence from the Company or its
Subsidiaries or Affiliates.
VESTING DATE OPTION VESTING
------------ --------------
The Participant may exercise the Option with respect to
the number of Shares that have vested, provided that
the Option shall terminate at the close of business on
_______________, 20___ (the "Option Termination Date").
The Option may be exercised in whole or in part, but
only with respect to full Shares, and shall be void and
of no effect after the Option Termination Date, unless
cancelled earlier pursuant to Section 3(b), (c) or (d)
below.
(b) If the Participant's Continuous Service is terminated
as a result of the Participant's death or Disability,
2
the Option shall immediately vest. The Participant's
estate or designated beneficiary shall be entitled to
exercise the outstanding Option until the earlier of
180 days following the termination of such Continuous
Service or the Option Termination Date.
(c) If the Participant's Continuous Service is terminated
for Cause, the outstanding Option shall be cancelled to
the extent not previously exercised and all rights
hereunder and under the Program shall terminate on the
date of such termination of Continuous Service.
(d) If the Participant's Continuous Service is terminated
for any reason other than those specifically described
in this Section 3, the Participant's Option shall
terminate immediately to the extent not yet exercisable
pursuant to Section 1 hereof, and the Participant shall
be entitled to exercise the outstanding Option until
the earlier of 60 days following such termination of
Continuous Service or the Option Termination Date.
(e) In the case of a Participant who is both an employee of
the Company or any Subsidiary or Affiliate and a member
of the Board of Directors of the Company, Continuous
Service shall not end until the Participant's service
as both an employee and a director terminates.
(f) The foregoing provisions of this Section 3 shall be
subject to the provisions of any written employment,
severance or similar agreement that has been or may be
executed by the Participant and the Company, and the
provisions in such agreement concerning the vesting and
exercise of the Option in connection with the
Participant's termination of Continuous Service shall
supercede any inconsistent or contrary provision of
this Section 3.
4. EXERCISE OF THE OPTION. Written notice of an election to
exercise any portion of the Option shall be given by the Participant,
or his or her personal representative in the event of the
Participant's death, in accordance with procedures established by the
Committee. At the time of exercise, payment of the purchase price for
the Shares with respect to which the Option is being exercised must be
made by (a) a cash payment, (b) in cash received from the
broker-dealer to whom the Participant has submitted an exercise notice
and irrevocable instructions to deliver the purchase price to the
Company from the proceeds of the sale of Shares subject to the Option,
(c) by having Shares withheld by the Company from any Shares that
would otherwise be received upon exercise of the Option, or (d) by any
other method approved by the Committee.
3
5. TAX WITHHOLDINGS AND PAYMENTS.
(a) The Company or any Subsidiary or Affiliate is
authorized to withhold from any payment to be made to
the Participant, amounts of income tax withholding and
other taxes due in connection with the exercise of the
Option. The Participant shall hold the Company
harmless for any damages caused by his or her failure
to so comply and for any other damages caused by his or
her actions or inactions.
(b) The Participant may pay such withholding taxes in any
method specified in Section 4 above. If the
Participant does not satisfy the withholding obligation
within a reasonable time established by the Committee,
the Participant's withholding obligation shall be
satisfied by the Company's withholding of Shares from
the Shares that would otherwise be received upon
exercise of the Option.
6. DELIVERY OF SHARES TO THE PARTICIPANT. As soon as
practicable after the Participant's payment of the Option exercise
price and withholding taxes, the custodian appointed by the Committee
from time to time (the "Custodian") shall, without transfer or issue
tax or other incidental expense to the Participant, deliver to the
Participant by first-class insured mail addressed to the Participant
at the address shown on page 1 or the last address of record on file
with the Custodian, or direct deposit, if applicable, (a) a statement
from the Custodian referencing the number of Shares held in the
Participant's name in book entry account, or (b) at the Participant's
request, certificate(s) for the number of Shares as to which the
Option has been exercised, and/or (c) the proceeds of the sale of
Shares in excess of the option exercise price and withholding tax
obligation.
7. CHARACTERISTICS OF OPTIONS.
(a) Options are not Shares and the grant of Options shall
provide only those rights expressly set forth in the
Agreement and the Program. The Participant is not
deemed to be a stockholder in the Company or have any
of the rights of a stockholder in the Company until he
or she acquires Shares upon exercise of the Option.
(b) The Participant does not have voting rights or any
other rights inherent to the ownership of Shares,
including the rights to dividends, or other liquidating
or non-liquidating distributions, by virtue of being
granted the Option.
(c) The Option shall, during the Participant's lifetime, be
exercisable only by the Participant, and neither it nor
4
any right hereunder or under the Program shall be
transferable otherwise than by will or the laws of
descent and distribution, or be subject to attachment,
execution or other similar process; provided, however,
that to the extent permitted by applicable law, the
Participant may designate a beneficiary pursuant to
procedures which may be established by the Committee.
In the event of any attempt by the Participant to
alienate, assign, pledge, hypothecate or otherwise
dispose of the Option or of any right hereunder or
under the Program, except as provided for in the
Program, or in the event of any levy or any attachment,
execution or similar process upon the rights or
interest conferred by the Option, the Company may
terminate the Option by notice to the Participant and
the Option shall thereupon be cancelled. Any person or
persons to whom the Participant's rights under the
Option have passed by will or by the applicable laws of
descent and distribution shall be subject to all the
terms and conditions of the Program and the Agreement
applicable to the Participant.
8. MISCELLANEOUS.
(a) The granting of an Award under the Program and the
Agreement shall impose no obligation on the Company or
any Subsidiary or Affiliate to continue the employment
relationship or any other relationship between it and
the Participant and shall not lessen or affect the
Company's, Subsidiary's or Affiliate's right to
terminate its relationship with the Participant. The
Participant shall have no claim to be granted any
further or other Award under the Program, and there is
no obligation for uniformity of treatment of the
Participants. The Participant acknowledges and agrees
that: (i) the Program is established voluntarily by the
Company, it is discretionary in nature and it may be
modified, amended, suspended or terminated by the
Company at any time; (ii) the grant of an Option is
voluntary and occasional and does not create any
contractual or other right to receive future grants of
Options, or benefits in lieu of an Option, even if
Options have been granted repeatedly in the past; (iii)
all decisions with respect to future Option grants, if
any, will be at the sole discretion of the Company;
(iv) participation in the Program is voluntary; (v) the
Options are not a part of normal or expected
compensation or salary for any purposes, including, but
not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement
benefits or similar payments; (vi) the future value of
5
the underlying shares is unknown and cannot be
predicted with certainty; and (vii) in consideration of
the grant of an Option, no claim or entitlement to
compensation or damages shall arise from termination of
the Option or diminution in value of the Option
including (without limitation) any claim or entitlement
resulting from termination of the Participant's active
employment by the Company or a Subsidiary or Affiliate
(for any reason whatsoever and whether or not in breach
of local labor laws) and the Participant hereby
releases the Company and its Subsidiaries and
Affiliates from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is found
by a court of competent jurisdiction to have arisen,
then, by signing this Agreement, the Participant shall
be deemed irrevocably to have waived the Participant's
entitlement to pursue such claim.
(b) The Agreement shall, subject the terms hereof,
terminate upon the forfeiture and/or exercise of the
entire Option granted to the Participant hereunder,
unless otherwise agreed upon by the parties hereto.
(c) The Agreement may be amended by the written agreement
of the Company and the Participant. Notwithstanding
the foregoing, (i) the Company may amend, alter or
discontinue the Agreement, without the consent of the
Participant so long as such amendment, alteration or
discontinuance would not impair any of the rights or
obligations under any Award theretofore granted to the
Participant under the Program; and (ii) the Committee
may amend the Agreement in such manner as it deems
necessary to permit the granting of Awards meeting the
requirements of the Code or other applicable laws.
(d) The parties agree that the Agreement shall be governed
by and interpreted and construed in accordance with the
laws of the United States and, in particular, those of
the State of Illinois without regard to its conflict of
law principles, as Illinois is the situs of the
principal corporate office of the Company.
Furthermore, to the extent not prohibited under
applicable law, and unless the Company affirmatively
elects in writing to allow the proceeding to be brought
(or itself brings such a proceeding) in a different
venue, the parties agree that any suit, action or
proceeding with respect to the Program, the Option or
the Agreement shall be brought in the state courts in
Chicago, Illinois or in the U.S. District Court for the
Northern District of Illinois. The parties hereby
accept the exclusive jurisdiction of those courts for
the purpose of any such suit, action or proceeding.
6
Venue for any such action, in addition to any other
venue required or otherwise mandated by statute, will
be in Chicago, Illinois. Each party further agrees to
waive any applicable right to a jury trial, and
expressly elects to have the matter heard as a bench
trial.
(e) Unless waived by the Company, any notice to the Company
required under or relating to the Agreement shall be in
writing and addressed to:
Chief Legal Officer
Heidrick & Struggles International, Inc.
233 South Wacker Drive
Suite 4200
Chicago, IL 60606-6303
9. PROGRAM GOVERNS. All terms and conditions of the Program
are incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Program
and the Agreement, the terms and conditions of the Program, as
interpreted by the Committee, shall govern.
10. DATA PRIVACY. By signing below, the Participant voluntarily
acknowledges and consents to the collection, use, processing and
transfer of personal data as described in this Section 10. The
Participant is not obliged to consent to such collection, use,
processing and transfer of personal data. However, the Participant's
failure to provide the consent may affect the Participant's ability to
participate in the Program. The Company and its Subsidiaries and
Affiliates hold certain personal information about the Participant,
including the Participant's name, home address and telephone number,
date of birth, employee identification number, salary, nationality,
job title, any shares of stock or directorships held in the Company,
details of all options or any other rights or entitlements to shares
of stock in the Participant's favor, for the purpose of managing and
administering the Program ("Data"). The Company, its Subsidiaries and
its Affiliates will transfer Data amongst themselves as necessary for
the purpose of implementation, administration and management of the
Participant's participation in the Program, and the Company and any of
its Subsidiaries or Affiliates may each further transfer Data to any
third parties assisting in the implementation, administration and
management of the Program. These recipients may be located in the
European Economic Area, or elsewhere throughout the world, such as the
United States. The Participant authorizes them to receive, possess,
use, retain and transfer the Data, in electronic or other form, for
the purposes of implementing, administering and managing the
Participant's participation in the Program, including any requisite
transfer of such Data as may be required for the administration of the
Program and/or the subsequent holding of Shares on the Participant's
behalf to a broker or other third party with whom the Participant may
elect to deposit any Shares acquired pursuant to the Program. The
7
Participant may, at any time, review Data, require any necessary
amendments to it or withdraw the consents herein in writing by
contacting the Company; however, by withdrawing consent, the
Participant will affect his or her ability to participate in the
Program.
11. EXECUTION OF THE AGREEMENT.
(a) The Parties agree that this Agreement shall be
considered executed by both parties executing the
Agreement as the first page hereof, which is a part
hereof.
(b) This Agreement, or any amendments thereto, may be
executed in counterparts, each of which shall be deemed
an original but all of which shall constitute one and
the same instrument.
(c) All terms and conditions of the Program are
incorporated herein and made part hereof as if stated
herein. If there is any conflict between the terms and
conditions of the Program and the Agreement, the terms
and conditions of the Program, as interpreted by the
Committee, shall govern.
8
EXHIBIT 10.4
RESTRICTED STOCK UNIT PARTICIPANT NAME
PARTICIPATION AGREEMENT
This Restricted Stock Unit Participation Agreement (the
"Agreement") is dated as of this ____ day of __________, 20___ and
sets forth the terms and conditions of the Award described below made
by Heidrick & Struggles International, Inc. (the "Company") to
_______________ (the "Participant"), pursuant to the 2007 Heidrick &
Struggles GlobalShare Program (the "Program").
As of _______________, 20___ (the "Grant Date"), the Company has
granted ____ Restricted Stock Units ("RSUs") to the Participant as set
forth herein. The RSUs are granted pursuant to the Program and are
governed by the terms and conditions of the Program. All defined terms
used herein, unless specifically defined in this Agreement, have the
meanings assigned to them in the Program. The Participant agrees to be
bound by all terms and conditions of the Agreement and the Program,
and has received and reviewed a copy of the Program and the Prospectus
for the Program dated _______________, 20___.
The RSUs granted under this Agreement shall not become valid or
enforceable unless and until the Participant executes the Agreement
and it is accepted by the Company. By the Participant's signature and
the Company's signature below, the Participant and the Company agree
that this constitutes the signature page of the Agreement.
Participant further agrees that the RSUs are granted under and
governed by the terms and conditions of the Agreement and the Program.
Agreements that are not signed and returned are considered null and
void.
IN WITNESS WHEREOF, the parties hereto have duly executed the
Agreement as of the date first set forth above.
----------------------------
Name: PARTICIPANT NAME
Heidrick & Struggles International, Inc.
By:_________________________
Name:
Title: Secretary
NOW, THEREFORE, in consideration of the agreements of the Participant
herein provided and pursuant to the Program, the parties agree as
follows:
1. DEFINITIONS. All capitalized terms used herein, unless
specifically defined herein, shall have the same meanings as
established in the Program.
2. PARTICIPATION. Pursuant to the Program and contingent upon
the execution of the Agreement, the Company hereby grants to the
Participant ____ RSUs subject to the terms and conditions herein. As a
material condition and inducement to the Company's grant of RSUs to
the Participant, the Participant agrees that he or she has received
and reviewed the Program and the Prospectus, and further agrees to be
bound by all of the terms and conditions of the Agreement and the
Program, as may be amended by the Company from time to time.
3. VESTING OF RSUs.
(a) Subject to Section 3(b) below, all RSUs granted under
the Agreement shall vest in accordance with the
schedule set forth below; provided, the Participant has
been in Continuous Service through each vesting date.
For purposes of the Agreement, "Continuous Service"
shall mean the Participant's service with the Company
or any Subsidiary or Affiliate as an employee, or the
Participant's service as a member of the Board of
Directors of the Company, has not been interrupted or
terminated, and shall include any period during which
the Participant is on an approved leave of absence from
the Company or its Subsidiaries or Affiliates.
VESTING DATE NUMBER OF SHARES VESTING
------------ ------------------------
(b) Notwithstanding the terms of Section 3(a) above, if the
Participant's Continuous Service is terminated as a
result of the Participant's death or Disability, all
RSUs granted to the Participant under the Agreement
will immediately vest.
(c) In the case of a Participant who is both an employee of
the Company or any Subsidiary or Affiliate and a member
of the Board of Directors of the Company, Continuous
Service shall not end until the Participant's service
as both an employee and a director terminates.
2
4. CHARACTERISTICS OF RSUs.
(a) RSUs are not Shares and the grant of RSUs shall provide
only those rights expressly set forth in the Agreement
and the Program. The Participant is not deemed to be a
stockholder in the Company or have any of the rights of
a stockholder in the Company by virtue of the grant of
RSUs.
(b) The Participant does not have voting rights or any
other rights inherent to the ownership of Shares,
including the rights to dividends, or other liquidating
or non-liquidating distributions, by virtue of being
granted RSUs.
(c) Neither the RSUs nor any right hereunder or under the
Program shall be transferable or be subject to
attachment, execution or other similar process. In the
event of any attempt by the Participant to alienate,
assign, pledge, hypothecate or otherwise dispose of the
RSUs or of any right hereunder or under the Program,
except as provided for in the Program, or in the event
of any levy or any attachment, execution or similar
process upon the rights or interest conferred by the
RSUs, the Company may terminate the RSUs by notice to
the Participant and the RSUs shall thereupon be
cancelled.
5. EFFECT OF VESTING.
(a) If, and at the time, the Participant's RSUs vest under
the terms of Section 3, such Participant shall receive
as full consideration for the RSUs a number of Shares
equal to the number of RSUs which vested on such date.
(b) The RSUs granted to the Participant shall be maintained
in a bookkeeping account with the custodian appointed
by the Committee from time to time (the "Custodian")
for such Participant if and until the RSUs are
converted into Shares pursuant to this Section 5, at
which time the Shares shall be issued to the
Participant in accordance with Section 7 below.
6. FORFEITURE OF RSUs. Subject to the next following sentence,
the Participant's RSUs shall be forfeited to the Company upon the
Participant's termination of Continuous Service with the Company and
its Subsidiaries and Affiliates for any reason other than the
Participant's death or Disability that occurs prior to the date the
RSUs vest as provided in Section 3 above. The foregoing provisions of
this Section 6 shall be subject to the provisions of the Company's
Policy for Treatment of RSUs Upon Retirement (the "Retirement
Policy"), and any written employment, severance or similar agreement
3
that has been or may be executed by the Participant and the Company,
and the provisions in such Retirement Policy or agreement concerning
the vesting of RSUs in connection with the Participant's termination
of Continuous Service shall supercede any inconsistent or contrary
provision of this Section 6.
7. DELIVERY OF SHARES TO THE PARTICIPANT. As soon as
practicable after the RSUs vest and are converted into Shares, and
subject to Section 8, the Custodian shall, without transfer or issue
tax or other incidental expense to the Participant, deliver to the
Participant by first-class insured mail addressed to the Participant
at the address shown on page 1 or the last address of record on file
with the Custodian, (a) a statement from the Custodian referencing the
number of Shares held in the Participant's name in a book entry
account, or (b) at the Participant's request, certificate(s) for the
number of Shares as to which the RSUs vested. In any event, Shares
due the Participant shall be delivered as described above no later
than March 15 of the year following the calendar year in which such
RSUs vest.
8. TAX WITHHOLDINGS AND PAYMENTS.
(a) The Company or any Subsidiary or Affiliate is
authorized to withhold from any payment to be made to
the Participant, amounts of income tax withholding and
other taxes due in connection with compensation or any
other transaction under the Program, including the
receipt of Shares under Section 5. The Participant
shall hold the Company harmless for any damages caused
by his or her failure to so comply and for any other
damages caused by his or her actions or inactions.
(b) The Participant may pay such withholding taxes in cash,
by having Shares withheld by the Company from any
Shares that would otherwise be received by the
Participant under the Agreement (in which case, the
number of Shares so withheld shall have an aggregate
Fair Market Value at the time of such withholding
sufficient to satisfy the applicable withholding
taxes), or by any other method approved by the
Committee. If the Participant does not satisfy the
withholding obligation by cash payment within a
reasonable time established by the Committee, the
Participant's withholding obligation shall be satisfied
by the Company's withholding of Shares from the vested
RSUs.
9. MISCELLANEOUS.
(a) The granting of an Award under the Program and the
Agreement shall impose no obligation on the Company or
any Subsidiary or Affiliate to continue the employment
4
relationship or any other relationship between it and
the Participant and shall not lessen or affect the
Company's, Subsidiary's or Affiliate's right to
terminate its relationship with the Participant. The
Participant shall have no claim to be granted any
further or other Award under the Program, and there is
no obligation for uniformity of treatment of the
Participants. The Participant acknowledges and agrees
that: (i) the Program is established voluntarily by the
Company, it is discretionary in nature and it may be
modified, amended, suspended or terminated by the
Company at any time; (ii) the grant of RSUs is
voluntary and occasional and does not create any
contractual or other right to receive future grants of
RSUs, or benefits in lieu of RSUs, even if RSUs have
been granted repeatedly in the past; (iii) all
decisions with respect to future RSU grants, if any,
will be at the sole discretion of the Company; (iv)
participation in the Program is voluntary; (v) the RSUs
are not a part of normal or expected compensation or
salary for any purposes, including, but not limited to,
calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or
similar payments; (vi) the future value of the
underlying shares is unknown and cannot be predicted
with certainty; and (vii) in consideration of the grant
of RSUs, no claim or entitlement to compensation or
damages shall arise from termination of the RSUs or
diminution in value of the RSUs or Shares received upon
vesting including (without limitation) any claim or
entitlement resulting from termination of the
Participant's active employment by the Company or a
Subsidiary or Affiliate (for any reason whatsoever and
whether or not in breach of local labor laws) and the
Participant hereby releases the Company and its
Subsidiaries and Affiliates from any such claim that
may arise; if, notwithstanding the foregoing, any such
claim is found by a court of competent jurisdiction to
have arisen, then, by signing this Agreement, the
Participant shall be deemed irrevocably to have waived
the Participant's entitlement to pursue such claim.
(b) The Agreement shall, subject the terms hereof,
terminate upon the forfeiture and/or vesting of all
RSUs granted to the Participant hereunder, unless
otherwise agreed upon by the parties hereto.
(c) The Agreement may be amended by the written agreement
of the Company and the Participant. Notwithstanding the
foregoing, (i) the Company may amend, alter or
discontinue the Agreement, without the consent of the
5
Participant so long as such amendment, alteration or
discontinuance would not impair any of the rights or
obligations under any Award theretofore granted to the
Participant under the Program; and (ii) the Committee
may amend the Agreement in such manner as it deems
necessary to permit the granting of Awards meeting the
requirements of the Code or other applicable laws.
(d) The parties agree that the Agreement shall be governed
by and interpreted and construed in accordance with the
laws of the United States and, in particular, those of
the State of Illinois without regard to its conflict of
law principles, as Illinois is the situs of the
principal corporate office of the Company. Furthermore,
to the extent not prohibited under applicable law, and
unless the Company affirmatively elects in writing to
allow the proceeding to be brought (or itself brings
such a proceeding) in a different venue, the parties
agree that any suit, action or proceeding with respect
to the Program, the RSUs or the Agreement shall be
brought in the state courts in Chicago, Illinois or in
the U.S. District Court for the Northern District of
Illinois. The parties hereby accept the exclusive
jurisdiction of those courts for the purpose of any
such suit, action or proceeding. Venue for any such
action, in addition to any other venue required or
otherwise mandated by statute, will be in Chicago,
Illinois. Each party further agrees to waive any
applicable right to a jury trial, and expressly elects
to have the matter heard as a bench trial.
(e) Unless waived by the Company, any notice to the Company
required under or relating to the Agreement shall be in
writing and addressed to:
Chief Legal Officer
Heidrick & Struggles International, Inc.
233 South Wacker Drive
Suite 4200
Chicago, IL 60606-6303
10. PROGRAM GOVERNS. All terms and conditions of the Program
are incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Program
and the Agreement, the terms and conditions of the Program, as
interpreted by the Committee, shall govern.
11. DATA PRIVACY. By signing below, the Participant voluntarily
acknowledges and consents to the collection, use, processing and
transfer of personal data as described in this Section 11. The
Participant is not obliged to consent to such collection, use,
processing and transfer of personal data. However, the Participant's
6
failure to provide the consent may affect the Participant's ability to
participate in the Program. The Company and its Subsidiaries and
Affiliates hold certain personal information about the Participant,
including the Participant's name, home address and telephone number,
date of birth, employee identification number, salary, nationality,
job title, any shares of stock or directorships held in the Company,
details of all options or any other rights or entitlements to shares
of stock in the Participant's favor, for the purpose of managing and
administering the Program ("Data"). The Company, its Subsidiaries and
its Affiliates will transfer Data amongst themselves as necessary for
the purpose of implementation, administration and management of the
Participant's participation in the Program, and the Company and any of
its Subsidiaries or Affiliates may each further transfer Data to any
third parties assisting in the implementation, administration and
management of the Program. These recipients may be located in the
European Economic Area, or elsewhere throughout the world, such as the
United States. The Participant authorizes them to receive, possess,
use, retain and transfer the Data, in electronic or other form, for
the purposes of implementing, administering and managing the
Participant's participation in the Program, including any requisite
transfer of such Data as may be required for the administration of the
Program and/or the subsequent holding of Shares on the Participant's
behalf to a broker or other third party with whom the Participant may
elect to deposit any Shares acquired pursuant to the Program. The
Participant may, at any time, review Data, require any necessary
amendments to it or withdraw the consents herein in writing by
contacting the Company; however, by withdrawing consent, the
Participant will affect his or her ability to participate in the
Program.
12. EXECUTION OF THE AGREEMENT.
(a) The Parties agree that this Agreement shall be
considered executed by both parties executing the
Agreement as the first page hereof, which is a part
hereof.
(b) This Agreement, or any amendments thereto, may be
executed in counterparts, each of which shall be deemed
an original but all of which shall constitute one and
the same instrument.
(c) All terms and conditions of the Program are
incorporated herein and made part hereof as if stated
herein. If there is any conflict between the terms and
conditions of the Program and the Agreement, the terms
and conditions of the Program, as interpreted by the
Committee, shall govern.
7