Exhibit 10.01
Heidrick & Struggles
International, Inc.
Change in Control Severance
Plan
(As Amended and Restated
Effective May 24, 2007)
Article 1. Establishment and
Purpose
1.1 Establishment of the
Plan. Heidrick &
Struggles International, Inc. (“the Company”) initially
established the “Heidrick & Struggles International,
Inc. Change in Control Severance Plan (the “Plan”)
effective as of December 12, 2001. The Company hereby amends
and restates the Plan effective as of May 24, 2007.
1.2 Purpose of the
Plan. The Board (as
defined herein) has determined that it is in the best interests of
the Company and its stockholders to continue to secure the
services, dedication and objectivity of certain key employees of
the Company in the event of any threat or occurrence of a Change in
Control, without concern as to whether such employees might be
hindered or distracted by personal uncertainties and risks created
by any such actual or threatened Change in Control.
Article 2.
Definitions
Whenever used in the Plan, the
following terms shall have the following meanings:
2.1 “Base
Salary” means a
Participant’s highest annual rate of salary, including any
amounts deferred at the election of the Participant, in effect at
any time during the 12 months immediately preceding such
Participant’s Termination Date.
2.2 “Benefit
Plans” means
(a) any benefit plan or arrangement providing the benefits
described in Section 3(1) of the Employee Retirement Income
Security Act of 1974 and (b) any plan or arrangement providing
for perquisites, such as car allowance, annual physical
examination, club memberships and similar benefits, in each case in
which the Participant was participating immediately prior to his or
her Termination Date, or if more favorable to the Participant,
immediately prior to the Change in Control.
2.3
“Board” means
the Board of Directors of the Company or its successor.
2.4 “Bonus
Amount” means the
annual target bonus for the Participant under the Company’s
Management Incentive Plan or any successor management plan for the
Participant as of the date immediately prior to the Change in
Control (but not the Fee/SOB bonus plan or any successor plan
thereto).
2.5
“Cause” means
(a) the willful and continued failure by the Participant to
substantially to perform his or her duties and obligations to the
Company (other than any such failure resulting from any physical or
mental condition, whether or not such condition constitutes a
Disability) or (b) the willful engaging by the Participant in
misconduct that is materially injurious to the Company, monetarily
or otherwise. For purposes of this definition, no act, or failure
to act, on a Participant’s part shall be considered
“willful” unless done, or omitted to be done, by the
Participant in bad faith and without reasonable belief that his or
her action or omission was in the best interests of the
Company.
2.6 “Change in
Control” means the
occurrence of any one of the following events:
(a) 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 (as defined in Rule
13d-3 under the Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company representing 30% or more
of the combined voting power of the Company’s
then-outstanding securities;
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(b) during any period of 24 months,
individuals who, at the beginning of such period, constitute the
Board, and any new director (other than (i) a director
nominated by a Person who has entered into an agreement with the
Company to effect a transaction described in Sections 2.6(a),
(c) or (d) hereof, (ii) 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 (iii) 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;
(c) 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 (i) 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 (ii) after which no Person holds 30% or
more of the combined voting power of the then outstanding
securities of the Company or such surviving entity or its parent
corporation);
(d) the consummation of a plan of
complete liquidation of the Company or a sale or disposition by the
Company of all or substantially all of the Company’s assets;
or
(e) any other event occurs which the
Board determines, in its discretion, to be a Change in
Control.
For purposes of this
Section 2.6, “Person” shall have the meaning
ascribed to such term in Section 3 of the Exchange Act or as
such term is used for purposes of Section 13(d) or 14(d) of
the Exchange Act. Notwithstanding the foregoing, a Change in
Control shall not occur with respect to the Participant by reason
of any event which would otherwise constitute a Change in Control
if, immediately after the occurrence of such event, (A) the
Company ceases to be subject to the requirement to file reports
pursuant to Section 13 or Section 15(d) of the Exchange
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
(B) 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, (I) 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 (II) 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.
2.7
“Committee” means the Human Resources and Compensation
Committee of the Board.
2.8
“Company” means Heidrick & Struggles
International, Inc., organized under the laws of the state of
Delaware, including any successor or successors thereto.
2.9
“Disability” means (a) a physical or mental condition
entitling the Company to terminate the Participant’s
employment pursuant to an employment agreement between the
Participant and the Company or (b) in the absence of such a
provision, a physical or mental incapacity of a Participant which
would entitle the Participant to benefits under the long term
disability plan maintained by the Company for its U.S. employees as
in effect immediately prior to a Change in Control (regardless of
whether the Participant is actually covered by such
plan).
2.10 “Exchange
Act” means the
Securities Exchange Act of 1934, as amended from time to time,
including rules thereunder.
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2.11 “Good
Reason,” means,
without a Participant’s express written consent, the
occurrence of any of the following events during the Protected
Period:
(a) the assignment to the
Participant of any duties materially inconsistent with, or the
material reduction of powers, responsibilities or functions
associated with, the Participant’s positions and status with
the Company immediately prior to a Change in Control, or any
removal of the Participant from, or any failure to reelect the
Participant to, any positions or offices with the Company that the
Participant held immediately prior to a Change in
Control;
(b) a material reduction by the
Company of the Participant’s base salary as in effect
immediately prior to a Change in Control or of such higher base
salary as may have been in effect during the Protected
Period;
(c) the failure by the Company to
pay the Participant his or her current compensation, or any
compensation deferred under any plan, agreement or arrangement of
or with the Company when such compensation is due;
(d) a change in the
Participant’s principal work location more than 50 miles from
the Participant’s principal work location immediately prior
to a Change in Control;
(e) a change in the
Participant’s required travel on the Company’s business
to the extent such travel obligations are substantially
inconsistent with the Participant’s business travel
obligations immediately prior to a Change in Control;
(f) (i) the Company’s failure
to continue in effect benefits provided under the Benefit Plans,
(ii) any act or omission by the Company that adversely affects
the Participant’s participation in, or materially reduces the
Participant’s benefits under, such Benefit Plans or
(iii) the material reduction by the Company of the number of
paid vacation days to which the Participant is entitled immediately
prior to a Change in Control;
(g) a material reduction in the
Participant’s annual bonus and long-term incentive
compensation opportunities from the level of annual bonus and
long-term incentive compensation opportunities made available to
the Participant immediately prior to the Change in
Control;
(h) a material increase in the
required working hours of the Participant from that required prior
to the Change in Control; or
(i) the Company’s failure to
obtain pursuant to Section 10.1 an assumption of the
Company’s obligations under the Plan by any successor to the
Company.
Notwithstanding the foregoing, an
isolated and inadvertent action taken in good faith and remedied by
the Company within 10 days after receipt of notice thereof from the
Participant shall not constitute Good Reason.
2.12 “Health
Benefits” means the
health, dental and/or vision benefits provided under a Benefit Plan
in which the Participant was participating immediately prior to his
or her Termination Date, or if more favorable to the Participant,
immediately prior to the Change in Control.
2.13
“Participant” means an employee of the Company who fulfills
the eligibility requirements as provided in Article 4 of the
Plan.
2.14
“Plan” means
this Heidrick & Struggles International, Inc. Change in
Control Severance Plan, as amended and restated effective as of
May 24, 2007.
2.15 “Protected
Period” means the
period beginning on the date on which a Change in Control occurs
and ending two years after that date. Anything in the Plan to the
contrary notwithstanding, if a Participant’s employment with
the Company is terminated or the terms and conditions of the
Participant’s employment are adversely changed in a manner
which would constitute grounds for a termination of employment by
the Participant
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for Good Reason prior to the date on which a
Change in Control occurs, and it is reasonably demonstrated that
such termination of employment or adverse change (a) was at
the request of a third party who has taken steps reasonably
calculated to effect the Change in Control or (b) otherwise
arose within six months prior to and in connection with or in
anticipation of the Change in Control, then for all purposes of the
Plan the “Protected Period” for such Participant shall
begin on the date immediately prior to the date of such termination
of employment or adverse change and end two years after the date of
such Change in Control.
2.16 “Severance
Factor” means a
number equal to (a) two and one-half, for a Participant
described in Section 4.1(a) with the title of Chief Executive
Officer of the Company on his or her Termination Date;
(b) two, for a Participant described in Section 4.1(a) in
a Tier I position (as defined in the Company’s Management
Incentive Plan) on his or her Termination Date; (c) one, for a
Participant described in Section 4.1(a) in a Tier II position
(as defined in the Company’s Management Incentive Plan) on
his or her Termination Date; and (d) for a Participant
described in Section 4.2, the number approved by the Committee
at the time the Committee approved the Participant’s Plan
participation.
2.17 “Severance
Period” means the
period of time beginning on the Participant’s Termination
Date and continuing for a number of years equal to the
Participant’s Severance Factor.
2.18 “Termination
Date” means the
effective date of a Participant’s termination of employment
as provided in Article 5.
Article 3.
Administration
3.1 Committee
. The Plan shall be administered by
the Committee. The Committee shall have full authority, consistent
with the Plan, to administer the Plan, including the authority to
make participation decisions as described in Article 4 and the
authority to interpret and construe any provisions of the Plan. The
Committee may, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for
the proper administration of the Plan, and may make determinations
and may take such other action in connection with or in relation to
the Plan as it deems necessary or advisable. The decisions of the
Committee shall be final and binding on all parties.
3.2 Indemnification
. No member of the Board or the
Committee shall be liable for any action taken or determination
made hereunder in good faith. Service on the Committee shall
constitute service as a member of the Board so that the members of
the Committee shall be entitled to indemnification and
reimbursement as directors of the Company pursuant to the
Company’s Restated Certificate of Incorporation and
By-Laws.
Article 4.
Participation
4.1 Section 16 of the
Exchange Act .
(a) Each employee of the Company who the Committee determines
is an officer subject to Section 16 of the Exchange Act shall
become a Participant in the Plan as of the date of such Committee
determination.
(b) An employee of the Company who
the Committee determines is no longer subject to Section 16 of
the Exchange Act shall cease to participate in the Plan as of the
date of such Committee determination.
4.2 Other Participants
. Each other employee of the Company
who was a Participant in the Plan on May 24, 2007 but was not
subject to Section 16 of the Exchange Act on such date shall
continue to participate in the Plan through December 31, 2007
in accordance with the terms of the Plan in effect immediately
prior to May 24, 2007. Such employee shall not be eligible to
participate in the Plan after December 31, 2007, unless and
until the Committee subsequently determines that he or she is
subject to Section 16 of the Exchange Act.
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Article 5. Termination of Employment During the
Protected Period
5.1 Termination of Employment by
the Company . During the
Protected Period, the Company shall have the right to terminate a
Participant’s employment hereunder for Cause, without Cause
or on account of the Participant’s Disability or death, by
following the procedures hereinafter specified.
(a) The Company may terminate a
Participant’s employment for Cause by vote of a majority of
the Board, but not unless and until the Board gives the Participant
written notice of intent to terminate the Participant’s
employment for Cause, specifying the particulars of the conduct of
the Participant forming the basis for such termination and setting
forth specific corrective action required of the Participant and,
subsequently, a majority of the Board finds, after at least 15 days
from the date of the notice, that termination of the
Participant’s employment for Cause is justified. Termination
of the Participant’s employment for Cause shall become
effective after such finding has been made by the Board and five
business days after the Board gives the Participant notice thereof,
specifying in detail the particulars of the conduct of the
Participant found by the Board to justify such termination for
Cause.
(b) The Company may terminate a
Participant’s employment without Cause by vote of a majority
of the Board. Termination of the Participant’s employment
without Cause shall be effective five business days after the Board
gives the Participant notice thereof, specifying that such
termination is without Cause.
(c) The Company may terminate a
Participant’s employment for Disability by vote of a majority
of the Board. Such Termination shall become effective 30 days after
a notice of intent to terminate the Participant’s employment,
specifying Disability as the basis for such termination, is given
to the Participant by the Board. Termination of a
Participant’s employment on account of his or her death shall
become effective as of the date of such death.
5.2 Termination of Employment by
a Participant . During
the Protected Period, a Participant shall be entitled to terminate
his or her employment with the Company for any reason, or for Good
Reason. The Participant shall give the Company written notice of
such termination of employment, and if such termination is for Good
Reason, set forth in reasonable detail the facts and circumstances
claimed by the Participant to constitute Good Reason. Termination
of Participant’s employment by the Participant pursuant to
this Section 5.2 shall be effective as of the date of such
notice, or if such termination is for Good Reason, five business
days after the Participant gives such notice.
Article 6. Payments Upon
Termination of Employment
6.1 Termination of Employment
Without Cause or For Good Reason . If during the Protected Period the
Participant’s employment is terminated by the Company without
Cause, or by the Participant for Good Reason, then the Company
shall provide to such Participant the following
benefits:
(a) The Company shall pay to the
Participant, within 45 days following the Termination Date, a lump
sum cash amount equal to the Participant’s Severance Factor
multiplie
