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
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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).
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(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.
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(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
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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
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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
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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.
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