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Headhunter.net - L.L.C. Employee Common Unit Option
Exhibit 10.2
HEADHUNTERS, L.L.C.
EMPLOYEE COMMON UNIT OPTION PLAN
DATED AS OF JANUARY 14, 1998
TABLE OF CONTENTS
Page
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1. PURPOSE.............................................................................................1
2. DEFINITIONS.........................................................................................1
3. ADMINISTRATION......................................................................................3
3.1 Board of Managers..........................................................................3
3.2 Action by Board of Managers................................................................3
3.3 No Liability...............................................................................3
4. UNITS...............................................................................................3
5. ELIGIBILITY.........................................................................................4
5.1 Designated Recipients......................................................................4
5.2 Successive Grants..........................................................................4
6. EFFECTIVE DATE AND TERM OF THE PLAN.................................................................4
6.1 Effective Date.............................................................................4
6.2 Term.......................................................................................4
7. GRANT OF UNIT OPTIONS...............................................................................4
8. UNIT OPTION AGREEMENTS..............................................................................4
9. UNIT OPTION PRICE...................................................................................5
10. Term AND EXERCISE...................................................................................5
10.1 Unit Option Period and Limitations on Exercise.........................................5
10.2 Limitations on Exercise of Unit Option.................................................5
10.3 Method of Exercise and Payment.........................................................5
10.4 Effective Date of Exercise.............................................................6
11. REPURCHASE..........................................................................................6
12. CANCELLATION OF UNITS...............................................................................6
12.1 Termination of Employment..............................................................6
12.2 Rights in the Event of Death...........................................................7
12.3 Rights In the Event of Disability......................................................7
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13. NONTRANSFERABILITY..................................................................................8
13.1 General Prohibition on Transfers.......................................................8
13.2 Family Transfers.......................................................................8
14. REQUIREMENTS OF LAW.................................................................................8
15. AMENDMENT AND TERMINATION OF THE PLAN...............................................................9
16. EFFECT OF CHANGE IN CONTROL AND CHANGES IN
CAPITALIZATION......................................................................................9
16.1 Changes in Ownership Interests.........................................................9
16.2 Reorganization in Which the Company Is the Surviving Entity............................9
16.3 Reorganization in Which the Company Is Not the Surviving Entity
or Sale of Assets or Units............................................................10
16.4 Adjustments...........................................................................10
16.5 No Limitations on Company.............................................................10
17. DISCLAIMER OF RIGHTS...............................................................................11
18. NONEXCLUSIVITY OF THE PLAN.........................................................................11
19. CAPTIONS...........................................................................................11
20. WITHHOLDING TAXES..................................................................................11
21. OTHER PROVISIONS...................................................................................12
22. NUMBER AND GENDER..................................................................................12
23. SEVERABILITY.......................................................................................12
24. GOVERNING LAW......................................................................................12
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HEADHUNTERS, L.L.C.
EMPLOYMENT COMMON UNIT OPTION PLAN
HeadHunters, L.L.C. sets forth the terms of an Employee Common Unit Option Plan (the "PLAN") as follows:
1.PURPOSE
This Plan is intended to advance the interests of the Company by providing eligible individuals (as designated pursuant to SECTION 5 hereof) an opportunity to acquire or increase a proprietary interest in the Company, which thereby will create a stronger incentive to expend maximum effort for the growth and success of the Company and its subsidiaries and will encourage such eligible individuals to continue to service the Company. To this end, this Plan provides for the grant of options to purchase Common Units of HeadHunters, L.L.C., all as set out herein.
2.DEFINITIONS
For purposes of interpreting this Plan and related documents (including Unit Option Agreements), the definitions in this SECTION 2 shall apply. Sections refer to sections of this Plan.
1933 Act: The Securities Act of 1933, as now in effect or as hereafter amended.
Affiliate: Any company or other trade or business that is controlled by or under common control with the Company (determined in accordance with the principles of Section 414(b) and 414(c) of the Code and the regulations thereunder) or is an affiliate of the Company within the meaning of Rule 405 of Regulation C under the 1933 Act.
Board of Managers: The Board of Managers of the Company.
Cause: Unless otherwise defined in a Unit Option Agreement, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of a criminal offense (other than minor traffic offenses); or (iii) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between a Holder and the Company or any of its Affiliates..
Code: Internal Revenue Code of 1986, as now in effect or as hereafter amended, and, unless the context otherwise requires, applicable Regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future revenue laws.
Company: HeadHunters, L.L.C. and any successor entity.
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Effective Date: The date of adoption of this Plan by the Board of Managers.
Exchange Act: The Securities Exchange Act of 1934, as now in effect or as hereafter amended.
Expiration Date: The tenth anniversary of the Grant Date.
Fair Market Value: The value of a Unit determined in accordance with industry-standard valuation procedures for such economic interests, taking into account, among other relevant criteria, capitalized earnings of the Company, the value of comparable companies and any discount applicable to such Units due to the illiquidity of an ownership interest in the Company.
Grant Date: The later of (i) the date as of which the Board of Managers approves the grant and (ii) the date as of which the Holder and the Company enter into the relationship resulting in the Holder being eligible for grants.
Holder: A person who holds Unit Options under this Plan.
Immediate Family Members: The spouse, children and grandchildren of the Holder.
Percentage Interest: An ownership interest in the Company expressed as a percentage of all ownership interests then outstanding.
Plan: The HeadHunters, L.L.C. Employee Common Unit Option Plan as provided for herein.
Unit: A "Common Unit" as that term is defined in the Limited Liability Company Agreement of HeadHunters, L.L.C.
Unit Option: A right to purchase one or more Units pursuant to this Plan.
Unit Option Agreement: The written agreement evidencing the grant of a Unit Option hereunder.
Unit Option Period: The period during which Unit Options may be exercised as defined in SECTION 10.
Unit Option Price: The purchase price for each Unit subject to a Unit Option.
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3.ADMINISTRATION
3.1.BOARD OF MANAGERS
This Plan shall be administered by the Board of Managers or by a committee designated by the Board of Managers for such purpose. If a committee is so designated, all references in this Plan to the Board of Managers and its members shall be deemed to include references to such committee and its members.
3.2.ACTION BY BOARD OF MANAGERS
The Board of Managers shall have such powers and authorities related to the administration of this Plan as are consistent with the Limited Liability Company Agreement of HeadHunters, L.L.C., as it may be amended from time to time, and applicable law. The Board of Managers shall have the full power and authority to take all actions and to make all determinations required or provided for under this Plan, any Unit Option granted hereunder, or any Unit Option Agreement entered into hereunder, and shall have the full power and authority to take all such other actions and determinations not inconsistent with the specific terms and provisions of this Plan that the Board of Managers deems to be necessary or appropriate to the administration of this Plan, any Unit Option granted hereunder, or any Unit Option Agreement entered into hereunder. All such actions and determinations shall be in accordance with the Limited Liability Company Agreement of HeadHunters, L.L.C. and with applicable law. The interpretation and construction by the Board of Managers of any provision of this Plan, any Unit Option granted hereunder, or any Unit Option Agreement entered into hereunder shall be final and conclusive.
3.3.NO LIABILITY
No member of the Board of Managers shall be liable for any action or determination made in good faith with respect to this Plan or any Unit Option granted or Unit Option Agreement entered into hereunder.
4.UNITS
The number of Units with respect to which Unit Options may be granted under this Plan shall not exceed 500,000 Units. If any Unit Options expire, terminate, or are terminated or canceled for any reason prior to exercise or vesting in full, the Units that were subject to the unexercised, forfeited, or terminated Unit Options shall be available for future grants of Unit Options under this Plan, such awards, if any, to be at the sole discretion of the Board of Managers.
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5.ELIGIBILITY
5.1.DESIGNATED RECIPIENTS
Unit Options may be granted under this Plan to (i) any employee who is employed by the Company on a full-time basis as the Board of Managers shall determine and designate from time to time or (ii) any other individual whose participation in this Plan is determined by the Board of Managers to be in the best interests of the Company and is so designated by the Board of Managers.
5.2.SUCCESSIVE GRANTS
An individual may hold more than one Unit Option, subject to such restrictions as are provided herein.
6.EFFECTIVE DATE AND TERM OF THE PLAN
6.1.EFFECTIVE DATE
This Plan shall be effective as of the date of adoption by the Board of Managers.
6.2.TERM
This Plan shall terminate on the tenth anniversary of the Effective Date.
7.GRANT OF UNIT OPTIONS
Subject to the terms and conditions of this Plan, the Board of Managers shall make grants of Unit Options to such eligible individuals as the Board of Managers may determine, on such terms and conditions as the Board of Managers may determine. Such authority specifically includes the authority, in order to effectuate the purposes of this Plan but without amending this Plan, to modify grants to eligible individuals who are foreign nationals or are individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom.
8.UNIT OPTION AGREEMENTS.
All Unit Options granted pursuant to this Plan shall be evidenced by Unit Option Agreements, to be executed by the Company and by the Holder, in such form or forms as the Board of Managers shall from time to time determine. Unit Option Agreements covering Unit Options granted from time to time or at the same time need not contain similar provisions; provided, however, that all such Unit Option Agreements shall comply with all terms of this Plan.
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9.UNIT OPTION PRICE.
The Unit Option Price shall be fixed by the Board of Managers and stated in each Unit Option Agreement. The Unit Option Price for a Unit shall not be less than the Fair Market Value of the Units on the Grant Date of the Unit Option. Fair Market Value shall be determined by the Board of Managers in good faith.
10.TERM AND EXERCISE.
Each Unit Option granted under this Plan shall terminate and all rights to purchase Units thereunder shall cease upon the expiration of ten years after the Grant Date of such Unit Option, or on such date prior thereto as may be fixed by the Board of Managers and stated in the Option Agreement relating to such Unit Option.
10.1.UNIT OPTION PERIOD AND LIMITATIONS ON EXERCISE
Each Unit Option granted under this Plan shall be exercisable, in whole or in part, at any time and from time to time over a period commencing on or after the Grant Date and ending upon the expiration or termination of the Unit Option, as the Board of Managers shall determine and set forth in the Unit Option Agreement relating to such Unit Option. Without limiting the foregoing, the Board of Managers, subject to the terms and conditions of this Plan, may in its sole discretion provide that a Unit Option may not be exercised in whole or in part for a stated period or periods of time during which such Unit Option is outstanding. Any limitation on the exercise of a Unit Option may be rescinded, modified or waived by the Board of Managers, in its sole discretion, at any time and from time to time after the Grant Date of such Unit Option, so as to accelerate the time at which the Unit Option may be exercised.
10.2.LIMITATIONS ON EXERCISE OF UNIT OPTION
Notwithstanding the foregoing Sections, in no event may the Unit Option be exercised: (i) in whole or in part, after ten years following the Grant Date of the Unit Option, or (ii) following termination of employment.
10.3.METHOD OF EXERCISE AND PAYMENT
Unit Options that are or become exercisable hereunder may be exercised by the Holder's delivery to the Company of written notice of the exercise and the number of Units for which the Unit Option are being exercised. Such delivery shall occur on any business day, at the Company's principal office, addressed to the attention of the Board of Managers. An attempt to exercise any Unit Option granted hereunder other than as set forth above shall be invalid and of no force and effect. Promptly after the exercise of Unit Options, the individual exercising the Unit Options shall pay to the Company in cash an amount equal to the Unit Option Price of the Units as to which Unit Options are being exercised.
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10.4.EFFECTIVE DATE OF EXERCISE.
Unless otherwise stated in the applicable Unit Option Agreement, (i) any exercise of a Unit Option shall be effective as of the first day of the Company's next fiscal quarter (for financial reporting purposes) beginning after the date of delivery to the Company of the exercise notice and the Unit Option Price, and (ii) an individual holding or exercising Unit Options shall have none of the rights of an owner of a Common Unit (e.g., the right to receive cash distributions attributable to the subject Common Units) until the effective date of such exercise hereunder.
11.REPURCHASE
At any time subsequent to the termination of the Optionee's employment by the Company (without regard to whether such termination is voluntary or involuntary, or for cause or otherwise), the Company may repurchase, and the Optionee (and any transferee of Option Units) shall be obligated to sell, all Option Units acquired through exercise of the Option for a price equal to the Fair Market Value of such Option Units. Fair Market Value for this purpose shall be the Fair Market Value of Option Units determined by the Board of Managers for purposes of granting Option Units as of the most recent date preceding the date on which notice is given of the Company's exercise of this repurchase right. Upon payment of the applicable amount to the Optionee (or transferee of the Option Units), all rights of the Optionee (or transferee of the Option Units) with respect to the Option Units shall terminate, and if as a result of such repurchase the Optionee (or transferee) no longer holds any Units of the Company, the Optionee (or transferee) shall cease to be a member of the Company. To exercise its right to repurchase Option Units hereunder, the Company shall give written notice to the Optionee of (i) its election to repurchase the Option Units, (ii) the Fair Market Value of the Option Units to be repurchased, and (iii) the closing date for the repurchase, which shall be not later than 60 days after the date of the notice required hereunder. In the case of any repurchase by the Company of Option Units under this SECTION 11 at the option of the Company, the Company may pay the purchase price to the Optionee (or transferee of the Option Units) in four or fewer equal annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. the Company shall pay at least one-fourth of the total purchase price each year, plus interest on the unpaid balance, with the first installment being made on the closing date of the purchase.
12.CANCELLATION OF UNITS
12.1.TERMINATION OF EMPLOYMENT
Upon the termination of the employment of a Holder with the Company or an Affiliate, other than by reason the death or "permanent and total disability" (within the meaning of Section 22(e)(3) of the Code), any Unit Option granted to the Holder pursuant
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to this Plan shall terminate, and such Holder shall have no further right to purchase Units pursuant to such Unit Option; provided, that the Board of Managers may provide, by inclusion of appropriate language in any Unit Option Agreement, that a Holder may (subject to the general limitations on exercise set forth in SECTION 10.1), in the event of termination of employment of the Holder with the Company or an Affiliate, exercise a Unit Option, in whole or in part, at any time subsequent to such termination of employment and prior to termination of the Unit Option pursuant to SECTION 10.1, either subject to or without regard to any installment limitation on exercise imposed pursuant to SECTION 10.1, as the Board of Managers, in its sole and absolute discretion, shall determine and set forth in the Unit Option Agreement. Whether a leave of absence or leave on military or government service shall constitute a termination of employment for purposes of this Plan, shall be determined by the Board of Managers, which determination shall be final and conclusive. For purposes of this Plan, a termination of employment with the Company or an Affiliate shall not be deemed to occur if the Holder is immediately thereafter employed with the Company or any other Affiliate.
12.2.RIGHTS IN THE EVENT OF DEATH
If a Holder dies while employed by the Company or an Affiliate, the executors or administrators or legatees or distributees of such Holder's estate shall have the right (subject to the general limitations on exercise set forth in SECTION 10.2), at any time within one year after the date of such Holder's death and prior to termination of the Option pursuant to SECTION 10, to exercise any Unit Option held by such Holder at the date of such Holder's death, whether or not such Unit Option was exercisable immediately prior to such Holder's death; provided however, that the Board of Managers may provide by inclusion of appropriate language in any Unit Option Agreement that, in the event of the death of a Holder, the executors of administrators or legatees or distributees of such Holder's estate may exercise a Unit Option (subject to the general limitations on exercise set forth in SECTION 10.1), in whole or in part, at any time subsequent to such Holder's death and prior to termination of the Unit Option pursuant to SECTION 10, either subject to or without regard to any installment limitation on exercise imposed pursuant to SECTION 10.1, as the Board of Managers, in its sole and absolute discretion, shall determine and set forth in the Unit Option Agreement.
12.3.RIGHTS IN THE EVENT OF DISABILITY.
If a Holder terminates employment with the Company or an Affiliate by reason of the "permanent and total disability" (within the meaning of Section 22(e)(3) of the Code) of such Holder, then such Holder shall have the right (subject to the general limitations on exercise set forth in SECTION 10.1), at any time within one year after such termination of employment and prior to termination of the Unit Option held by such Holder at the date of such termination of employment, whether or not such Unit Option was exercisable immediately prior to such termination of employment; provided; however, that the Board of Managers may provide, by inclusion of appropriate language in any Unit Option Agreement, that a Holder may (subject to the general limitations on
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exercise set forth in SECTION 10.1), in the event of the termination of employment of the Holder with the Company or an Affiliate by reason of the "permanent and total disability" (within the meaning of Section 22(e)(3) of the Code) of such Holder, exercise a Unit Option, in whole or in part, at any time subsequent to such termination of employment and prior to termination of the Unit Option pursuant to SECTION 10, either subject to or without regard to any installment limitation on exercise imposed pursuant to SECTION 10.1, as the Board of Managers, in its sole and absolute discretion, shall determine and set forth in the Unit Option Agreement. Whether a termination of employment is to be considered by reason of "permanent and total disability" for purposes of this Plan shall be determined by the Board of Managers, which determination shall be final and conclusive.
13.NONTRANSFERABILITY
13.1.GENERAL PROHIBITION ON TRANSFERS
Except as provided in SECTION 13.2, during the lifetime of a Holder, only such Holder (or, in the event of legal incapacity or incompetency, the guardian or legal representative of the Holder) may exercise Unit Options.
13.2.FAMILY TRANSFERS
Subject to the terms of the applicable Unit Option Agreement, a Holder may transfer all or part of a Unit Option to (i) any Immediate Family Member, (ii) a trust or trusts for the exclusive benefit of any Immediate Family Member, or (iii) a partnership or limited liability company in which Immediate Family Members and trusts described in the foregoing clause (ii) are the only members or partners, provided that (x) there may be no consideration for any such transfer, and (y) subsequent transfers of transferred Unit Options are prohibited except those in accordance with this SECTION 13.2 or by will or the laws of descent and distribution. Following transfer, any such Unit Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of this SECTION 13.2 hereof the term "Holder" shall be deemed to refer the transferee. The provisions of SECTION 11 shall continue to be applied to the transferred Unit Option with reference to the original Holder, and the transferred Unit Option shall be exercisable by the transferee only to the extent, and for the periods specified in SECTION 11.
14.REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any securities under any Unit Option Agreement if the sale or issuance of such securities would constitute a violation by the Holder, the individual exercising Unit Options, or the Company of any provisions of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any securities upon any securities exchange or under any governmental regulatory body is
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necessary or desirable as a condition of, or in connection with, the issuance or purchase of securities hereunder, Unit Options may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of Unit Options. Any determination in this connection by the Board of Managers shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the 1933 Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of Unit Options or the issuance of securities pursuant thereto to comply with any law or regulation of any governmental authority.
15.AMENDMENT AND TERMINATION OF THE PLAN
The Board of Managers may, at any time and from time to time, amend, suspend, or terminate this Plan as to any Units as to which Unit Options have not been granted. The Company may retain the right in a Unit Option Agreement to cause a forfeiture of the rights of a Holder on account of the Holder taking actions in "competition with the Company," as defined in the applicable Unit Option Agreement. Except as permitted under this SECTION 16, no amendment, suspension, or termination of this Plan shall, without the consent of the Holder, alter or impair rights or obligations under any Unit Options theretofore granted under this Plan.
16.EFFECT OF CHANGE IN CONTROL AND CHANGES IN CAPITALIZATION
16.1.CHANGES IN OWNERSHIP INTERESTS
If the outstanding Units in the Company are increased or decreased or the Units are changed into or exchanged for a different number or kind of interests or other securities of the Company on account of any recapitalization, reclassification, split-up, reverse split, combination of interests, exchange of interests, dividend or other distribution payable in Units, or other increase or decrease in such Units effected without receipt of consideration by the Company, occurring after the Effective Date of this Plan, the number and kinds of Units as to which Unit Options may be granted under this Plan shall be adjusted proportionately and accordingly by the Board of Managers. In addition, the number and kind of Units as to which Unit Options are outstanding shall be adjusted proportionately and accordingly so that the proportionate interest of the Holder immediately following such event shall, to the extent practicable, be equivalent as immediately before such event. Any such adjustment in outstanding Unit Options shall not change the aggregate Unit Option Price with respect to Units that are subject to the unexercised portion of Unit Options outstanding but shall include a corresponding proportionate adjustment in the Unit Option Price per Unit.
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16.2.REORGANIZATION IN WHICH THE COMPANY IS THE SURVIVING ENTITY
Subject to SECTION 16.3, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities, any Unit Option theretofore granted pursuant to this Plan shall pertain to and apply to the securities to which a holder of the number of Units subject to such Unit Option would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Unit Option Price per Unit so that the aggregate Unit Option Price thereafter shall be the same as the aggregate Unit Option Price of the Units remaining subject to the Unit Option immediately prior to such reorganization, merger, or consolidation.
16.3.REORGANIZATION IN WHICH THE COMPANY IS NOT THE SURVIVING ENTITY OR
SALE OF ASSETS OR UNITS
Upon the dissolution or liquidation of the Company, or upon a merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity, or upon a sale of substantially all of the assets of the Company to another entity, or upon any transaction (including, without limitation, a merger or reorganization in which the Company is the surviving entity) approved by the Board of Managers that results in any person or entity (or person or entities acting as a group or otherwise in concert) owning 80 percent or more of the combined voting power of all classes of securities of the Company, this Plan and all Unit Options outstanding hereunder shall terminate, except to the extent provision is made in writing in connection with such transaction for the continuation of this Plan or the assumption of such Unit Options theretofore granted, or for the substitution for such Unit Options of new options covering the stock, limited liability company interests or units, or partnership interests or units of a successor Company, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares or units and exercise prices, in which event this Plan and Unit Options theretofore granted shall continue in the manner and under the terms so provided. In the event of any such termination of this Plan, each individual holding a Unit Option shall have the right (subject to the general limitations on exercise set forth in SECTION 10.1), immediately before the occurrence of such termination and during such period occurring before such termination as the Board of Managers in its sole discretion shall determine and designate, to exercise such Unit Option in whole or in part, whether or not such Unit Option was otherwise exercisable at the time such termination occurs. The Board of Managers shall send written notice of an event that will result in such a termination to all individuals who hold Unit Options not later than the time at which the Company gives notice thereof to its members.
16.4.ADJUSTMENTS
Adjustments under this SECTION 16 related to Units or securities of the Company shall be made by the Board of Managers, whose determination in that respect shall be final, binding, and conclusive.
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16.5.NO LIMITATIONS ON COMPANY
The grant of Unit Options pursuant to this Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.
17.DISCLAIMER OF RIGHTS
No provision in this Plan or in any Unit Options granted or Unit Option Agreement entered into pursuant to this Plan shall be construed to confer upon any individual the ...
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